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Last Article Uploaded: Tuesday, October 26th, 10:21AM


Mortgage Rates Daily Commentary
Tuesday 26 October 2021  Add your comment
What do retired bank CEOs do? Find out here

We've had a few banks get new CEOs this year. Two of the big banks, BNZ and Westpac have new leaders. SBS Bank CEO Shaun Drylie stepped aside recently and made some pointed comments.

Also, The Co-Operative Bank CEO David Cunningham stepped down. Instead of picking up some new gig in banking he is off on @DavesBikeDream. Yesterday David started on a Make-A-Wish fund raising cycle trip from the bottom of the South Island to the top of the North Island. His goal is to raise $30,000 for the charity so it can grant the wishes of New Zealand children who have critical illnesses to give them hope, strength and joy.

If you would like to tip a few dollars into the pot for a great cause then click here.

TMM is onboard and I hope you will join us supporting David.

We are seeing a raft of increases in home loan rates - see all the red below.

The mortgage industry had to work harder to help people buffeted by economic turmoil to switch their mortgage arrangements, a webinar on product replacement has been told.[READ ON]

Latest Headlines

Expect lower mortgage rates in six months: Stephens

Home loan interest rates are likely to be lower in six months’ time than they are today, Westpac’s chief economist says.

Monday, February 15th 2016, 6:00AM 2 Comments

by Susan Edmunds

Dominick Stephens is predicting a 50bps point cut in the official cash rate this year, probably in June.

He said that would mean floating rates were highly likely to fall and there was a good chance fixed rates would follow.

Cameron Bagrie, ANZ’s chief economist, agreed it was possible that mortgage rates would come down further. The major banks are currently advertising two-year specials as low as 4.49%.

But he said there was too much fixation on what the Reserve Bank was doing, forgetting the other factors that would drive home loan prices.

“At the end of the day, to be able to lend a dollar, banks have got to find a dollar. And it is costing more to attract those dollars.”

He said over the next three to four weeks, deposit rates could change a lot.

“If it becomes more expensive to raise money overseas, it is logical that they will go more aggressive to attract local deposits,” he said.

If that happened, mortgage rates might follow.  “But I don’t think the Reserve Bank wants borrowing rates to go up so if they see the funding cost pressure they might need to cut the official cash rate.”

He said he was not expecting an OCR cut but was “on notice”.

Stephens agreed funding pressure could cause a short-term increase in rates but said it was unlikely to last.

“When the penny drops and it becomes more obvious to others than an OCR cut is going to happen, the two-year swap rates will fall and we could see a wider spread between mortgage and swap rates.  In the short run [mortgage rates] might pop up a tiny bit higher but they will be lower in six months’ time than they are now.”

ASB is also predicting an OCR cut.  Chief economist Nick Tuffley predicts the OCR will stay at 2% until March 2018, lower for longer than the generally-held market view.

Tuffley said the ASB outlook was driven by prediction of ongoing weak inflation.

But he said there were a lot of “moving parts” that would determine how much of the low OCR would filter through to home loan rates.

He said there were potential ripple effects such as the rise in risk premiums in markets in which New Zealand secures foreign funding.

“Right here, right now, it’s hard to know the likelihood of any move.  If we do get some pretty substantial moves down in wholesale rates because of the Reserve Bank cutting then we are more likely to get dragged downward in mortgage rates.”

A potential question mark hovered over what the US Federal Reserve decided at its March meeting, he said. The market had price out any chance of an increase in the US cash rate over this year and most of next.

“If there was any Fed increase, because it’s not priced in, it would push US interest rates up sharply, which could have a knock-on effect in New Zealand as well.”

Tags: interest rates Mortgage Rates OCR OCR forecasts RBNZ

« ASB reports record halfDropping rates should boost slow growth »

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Comments from our readers

On 16 February 2016 at 3:30 pm ngyuanking said:
The market feels extremely bearish right now. What are interest rates trends in bear vs bull markets?
On 17 February 2016 at 9:40 am rockyb said:
In a bear market interest rates are kept low to encourage spending

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 ▲3.25 ▲3.75 ▲3.99
ANZ 4.59 ▲3.84 ▲4.30 ▲4.54
ANZ Blueprint to Build 1.68 - - -
ANZ Special - ▲3.24 ▲3.70 ▲3.94
ASB Back My Build 2.04 - - -
ASB Bank 4.45 ▲3.25 ▲3.75 ▲3.99
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▲3.24 ▲3.79 ▲3.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.70 ▲3.84 ▲4.39 ▲4.59
BNZ - TotalMoney 4.70 - - -
CFML Loans 5.15 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.45 2.85 3.15
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 4.00 ▲4.14 ▲4.44 ▲4.84
Kiwibank - Offset 4.00 - - -
Kiwibank Special 3.75 ▲3.29 ▲3.59 ▲3.99
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 3.05 3.45 3.75
SBS Bank Special - 2.55 2.95 3.25
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.79 - -
The Co-operative Bank - Owner Occ 4.55 ▲2.99 ▲3.60 ▲3.89
The Co-operative Bank - Standard 4.55 ▼3.49 ▲4.10 ▲4.39
TSB Bank 5.34 ▲3.75 ▲4.20 ▲4.44
TSB Special 4.54 ▲2.94 ▲3.40 ▲3.64
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.84 ▲3.79 ▲4.39 ▲4.59
Westpac - Offset 4.84 - - -
Westpac Special - ▲3.19 ▲3.79 ▲3.99
Median 4.57 3.24 3.60 3.94

Last updated: 26 October 2021 9:14am

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