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Last Article Uploaded: Thursday, January 20th, 7:54PM

Mortgages

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ASB predicts “mild” OCR increase

Lender ASB believes there will be a “mild” tightening cycle at the Reserve Bank, with floating and fixed rate mortgages expected to remain stable until the end of next year.

Thursday, July 5th 2018, 3:48PM

by Dan Dunkley

In its latest Home Loan Rate Report, ASB says it anticipates RBNZ monetary tightening to be “modest in relation to historical norms”. The bank said it expects central bank policy to limit uplift in local short-term rates.

The bank believes short-term fixed rates offer the best value for Kiwi home buyers in the current market, with competition between the banks helping to suppress rates. The bank’s team of economists said: “While the future is inherently uncertain, our forecasts suggest carded 1- to 2-year fixed rates are unlikely to approach the current floating rate until about 2020/2021.

“As such, splitting the mortgage into different terms, or a mix of floating and short-term fixed mortgages, is a strategy for keeping some flexibility while locking in some interest rate certainty,” the bank argued.

Like many of its rivals, the lender does not expect the Reserve Bank to raise the OCR rate until November 2019.  However, ASB believes there is an outside chance things could accelerate if rate increases in other major markets, such as the US, feed through to New Zealand.

Mortgage lending has risen this year after a slow end to 2017 and a tough start to this year, according to recent data. RBNZ statistics for May show that lending rose to $6.59bn, up from $5.37bn in April and just $3.69bn in January.

First home buyers, buoyed by continued low interest rates and weakened demand from property investors, are beginning to take up a larger slice of the New Zealand market. They borrowed over $1.1bn in May, up from $833m the same month last year, according to the Reserve Bank data.

Tags: ASB interest rates LVR Macro Prudential Tools OCR

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.60 3.65 4.15 4.69
ANZ 4.79 4.25 4.95 5.35
ANZ Blueprint to Build 2.03 - - -
ANZ Special - 3.65 4.35 4.75
ASB Back My Build 2.29 - - -
ASB Bank 4.60 3.65 4.15 4.69
Avanti Finance 4.55 - - -
Basecorp Finance 5.49 - - -
Bluestone 4.09 4.29 4.86 5.09
BNZ - Classic - 3.65 4.35 4.69
BNZ - Mortgage One 5.15 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Rapid Repay 4.95 - - -
BNZ - Std, FlyBuys 4.95 4.25 4.95 5.29
BNZ - TotalMoney 4.95 - - -
CFML Loans 5.35 - - -
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 - - -
First Credit Union Special 5.85 3.59 4.09 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 5.25 4.25 4.75 -
HSBC Premier 4.49 2.19 2.45 2.69
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 4.25 3.49 4.05 4.55
Kainga Ora 4.60 4.03 4.68 5.07
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 4.25 4.54 5.20 5.54
Kiwibank - Offset 4.25 - - -
Kiwibank Special 4.25 3.69 4.35 4.69
Liberty 4.84 - - -
Nelson Building Society 4.95 4.29 4.85 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.39 3.54 3.89 4.09
SBS Bank 4.79 3.95 4.49 4.85
SBS Bank Special - 3.45 3.99 4.35
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - 3.45 - -
The Co-operative Bank - Owner Occ 4.75 3.65 4.35 4.69
The Co-operative Bank - Standard 4.75 4.15 4.85 5.19
TSB Bank 5.34 4.09 4.74 4.99
TSB Special 4.54 3.29 3.94 4.19
Unity 5.65 4.15 4.60 -
Wairarapa Building Society 4.99 4.05 4.50 -
Lender Flt 1yr 2yr 3yr
Westpac 5.09 4.29 4.95 5.29
Westpac - Offset 5.09 - - -
Westpac Special - 3.69 4.35 4.69
Median 4.77 3.69 4.42 4.69

Last updated: 19 January 2022 12:41pm

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