tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, March 29th, 10:40AM

Mortgages

Mortgage Rates Daily Commentary
Thursday 28 March 2024  Add your comment
Lifetime Home Masterclass

New Zealand’s first debt-free home equity release income solution, Lifetime Home allows Kiwi retirees aged 70 and above to access the wealth tied up in their home to bolster their retirement income.

Lifetime Home requires no mortgage, no debt, and no interest payments. Instead, it offers certainty and financial peace of mind when it’s needed most.

Master Class for Financial and Mortgage Advisers
Join Lifetime’s founder and managing director, Ralph Stewart and Chief Marketing Officer, Chelsea Devlin to find out everything you need to know about Lifetime Home.

Lifetime Home master classes will be held in-person in Christchurch, Wellington, and Auckland, and online.

To book your tickets CLICK HERE

rss
Latest Headlines

Auckland affordability a credit negative - Moodys

Poor housing affordability in Auckland is a credit negative for New Zealand covered bonds backed by mortgages in the city, according to a global ratings service.

Wednesday, March 8th 2017, 12:26PM

by Miriam Bell

A new report by Moody’s Investors Service has found that Auckland’s affordability improved in 2016 – thanks to low income rates and a rise in incomes.

But the proportion of income needed to meet mortgage repayments remains high and considerably more than in other regions.

Moody’s associate analyst Karen Burkhardt said Auckland’s high housing prices mean new home owners spend on average nearly half (46.5%) of their monthly income on mortgage repayments.

Poor housing affordability increases the risk of mortgage delinquencies and defaults.

“Auckland accounts for almost half (49.5%) of the loans in New Zealand cover pools,” she said.

“As such, we view the city’s poor housing affordability as credit negative for New Zealand covered bonds backed by mortgages on Auckland properties.”

However, the risks posed by poor housing affordability are mitigated by the current low weighted average LVRs on residential mortgage loans in New Zealand cover pools.

The report noted that the Reserve Bank has imposed limits on the proportion of mortgages with high LVRs that banks can write since 2013.

“This reduces the exposures of banks and covered bond programmes to higher-risk lending and provide a buffer in the event of declining house prices.”

When it came to the rest of New Zealand, the report found housing affordability improved in Canterbury, Gisborne/Hawkes Bay, Manawatu-Wanganui, Northland, Southland and Waikato/Bay of Plenty in 2016.

This was due to a combination of rising household incomes and lower mortgage interest rates.

However, housing affordability deteriorated in the Otago, Wellington, Taranaki and Nelson/Marlborough regions over the year.

This was because of rapid housing price increases and either declines or relatively small increases in household incomes.

As part of the report, Moody’s also ran a sensitivity analysis to gauge the impact of changes in house prices, interest rates and LVRs on housing affordability in New Zealand.

The analysis showed that Auckland is the most sensitive of any region in New Zealand to any shift in these factors.

For example, if mortgage interest rates were to rise to the 10-year average of 6.5%, the percentage of household income needed to meet mortgage repayments would increase by 8.2 percentage points in Auckland.

This is as compared to 5.5 percentage points on average across New Zealand.

While mortgage rates remain low by historical standards, they have been rising in recent months and commentators have been warning this could have a significant impact on some home owners.

The Moody’s data highlights the additional mortgage pressure that Auckland households could end up dealing with if mortgages rates continue to track upwards.

Read more:

Super City affordability slides further 

Volatility leads to tighter lending environment 

Tags: banks LVR Mortgage Rates mortgages Ratings RBNZ Reserve Bank

« DTIs should be in RBNZ toolkit - IMFWhat the RB governor said »

Special Offers

Comments from our readers

No comments yet

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
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 28 March 2024 9:42am

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  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com