About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Monday, September 23rd, 10:30AM
Mortgage Rates Daily Commentary
Friday 20 September 2019  Add your comment
SBS rate cut; OCR preview

Good morning.

As Spring kicks in, another bank has slashed mortgage rates.

SBS Bank’s 3 year rate drops to 3.89%, level with ASB. Check out our rates table here.

Meanwhile, economists have told us they don’t expect the Reserve Bank to cut the Official Cash Rate next week. See why here: [READ ON].

rss
Latest Headlines

DTIs cost benefit analysis ordered

Another obstacle has been placed in the Reserve Bank’s path towards the introduction of debt-to-income ratios (DTIs).

Wednesday, February 8th 2017, 2:58PM 1 Comment

by Miriam Bell

Finance Minister Stephen Joyce has told the Reserve Bank to conduct a full cost-benefit analysis, along with a public consultation, on DTIs before any decision is made on their use.

Joyce said he has discussed DTIs with Reserve Bank governor Graeme Wheeler who is concerned about the levels of debt in some households given recent increases in house prices.

“I have decided that, consistent with good regulatory principles, a full cost-benefit analysis and consultation with the public should occur before I consider whether to amend the Memorandum of Understanding (MOU) on macro-prudential policy.”

Given the novel nature of a DTI tool and the fact there are a number of possible policy actions the Reserve Bank could take, it is important the costs and benefits of the different policy options are adequately and rigorously explored, Joyce said.

While the Reserve Bank has been pushing for the ability to add DTIs to its MOU with the government, the government has been less enthusiastic about their adoption.

Late last year a planned meeting, on DTIs, between the Reserve Bank and then Finance Minister Bill English was delayed indefinitely when English ascended to the role of Prime Minister.

At the time, economists said the delay meant it would be unlikely that DTIs would be introduced before the end of 2017.

Today’s announcement makes the arrival of DTIs anytime soon even more unlikely.

Joyce said the Reserve Bank already has a number of regulatory tools available to it to address systemic risks it identifies and he is cautious about adding further tools to the toolkit.

“The use of macro-prudential tools can be complex and affect different borrowers in different ways. I am particularly interested in what the impacts could be on first home buyers.”

This development should please critics of the proposed DTIs who have said their introduction could have a severe impact on first home buyers and is likely to impact negatively on attempts to boost housing supply.

Meanwhile, the Reserve Bank is still collecting information about the DTI levels that borrowers are obtaining and assessing the potential case for the use of DTIs.

It has indicated that public consultation on DTIs will commence in March and take place during the first half of 2017.

In the past, Wheeler has refused to be drawn on the level at which a DTI ratio could be set if it is introduced.

He has also said that if the Reserve Bank did have DTI ratios at its disposal, it wouldn’t introduce them at this time.

Read more:

Progress of DTIs stalls  

Addressing housing market risks  

Risks in new RBNZ proposal  

 

 

 

Tags: Macro Prudential Tools RBNZ Reserve Bank

« Questions over future RBNZ policyWhat the RB governor said »

Special Offers

Comments from our readers

On 9 February 2017 at 8:46 am LNF said:
Debt to income, or servicing ability used to be standard lending policy. I don't know why that changed. Perhaps debt is an important part of the economy. Perhaps someone who knows a lot more than me can enlighten

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.15 ▼4.04 4.49
ANZ Special - 3.65 ▼3.54 3.99
ASB Bank 5.20 4.15 4.09 4.39
ASB Bank Special - 3.65 3.59 3.89
BNZ - Classic - 3.65 ▼3.49 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
Housing NZ Corp 5.19 ▼4.15 ▼4.09 ▼4.39
HSBC Premier 5.24 3.35 3.35 3.35
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.30 4.34 4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.59 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.69 4.79 -
Resimac 5.30 4.86 4.14 4.19
Lender Flt 1yr 2yr 3yr
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.69 3.69 ▼3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.65 3.59 3.99
The Co-operative Bank - Standard 5.15 4.15 4.09 4.49
TSB Bank 6.09 4.65 4.59 4.85
TSB Special 5.29 3.85 3.79 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.34 - - -
Westpac Special - 3.65 ▼3.54 3.99
Median 5.35 4.15 4.09 4.19

Last updated: 20 September 2019 9:30am

Previous News

MORE NEWS»

News Bites
Compare Mortgage Rates
Compare
From
To
For

To graph multiple lenders, hold down Ctrl key while clicking in list box

Also compare rates to OCR
Find a Mortgage Broker

Add your company

Use map
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com