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Rates quiet, some upward pressure applied

Weekly Home Loan report: The home loan rate market has gone very quiet in the past week with very few changes to report.

Tuesday, April 18th 2006, 12:00AM

by The Landlord

The main piece of news impacting on the market was the retail sales numbers for February which were released late last week. These came in much more strongly than anticipated suggesting that the economy hadn’t slowed as much as many pundits had been predicting.

Such a piece of data will help support the Reserve Bank’s view that the economy is still strong and that any cuts to its official cash rate are some way out still.

However, some economists note that it is a dangerous game to place too much emphasis on any one piece of data. The key upshot of the retail spending numbers is that there was a slight increase in wholesale interest rates, thus slowing the flow of cuts to key rates, such as the two-year fixed home loan rate and even putting some upward pressure on them. There is still a divergent view on the question of when will the Reserve Bank start into its easing cycle. Westpac, for one is saying “We continue to believe that the overriding weakness in recent economic data and sentiment will see interest rate cuts around mid-year” and Bank of New Zealand taking a more hawkish view suggesting cuts will not happen until December.

It is forecasting that the cash rate will stay at its current 7.25% until December when it will be cut by 0.25% and all up cuts this cycle at likely to total around 1.5% come 2008.

During the past week there have only been two changes of note. One is to the BNZ’s five-year rate which came down slightly at the start of last week and today HSBC has lowered its one and two year rates, bringing them into line with the other banks.

Currently six-month rates start at 7.99% and go all the way up to 9.00%, however the second highest rate, AXA’s, is 8.50%. The choice of provider in this term is much smaller than other terms as only around half the market offer six-month rates.

One year rates are in a very similar range to six-month rates, again starting at 7.60%.

In the two-year term the lowest rate on offer is 7.50% from Mortgage Finance, Kiwibank and Bank of New Zealand. The other big banks are sitting at the 7.70-7.75% mark.

Three-year rates have the lowest starting point in the market, being 7.30% from Mortgage Finance and Kiwibank. BNZ, which has pitched itself as the lowest big bank, is 20 basis points higher at 7.50%.

In the five-year term Bank Direct is the lowest with a rate of 7.40%.

To compare home loan rates go to the Good Returns Mortgage Rate Section

« Rates up, up and awayReserve Bank leaves rates unchanged and rules outs any cuts this year »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.29 2.59 2.65
ANZ 4.44 2.89 3.25 3.39
ANZ Special - 2.29 2.69 2.79
ASB Bank 4.45 2.29 2.59 2.65
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.29 2.59 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 2.89 3.19 3.39
BNZ - TotalMoney 4.55 - - -
Lender Flt 1yr 2yr 3yr
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
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 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 ▼3.40 ▲3.50 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - ▲2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.79 2.79 3.15
SBS Bank Special - 2.29 2.29 2.65
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 2.29 2.59 2.79
The Co-operative Bank - Standard 4.40 2.79 3.09 3.29
TSB Bank 5.34 3.09 3.29 3.45
TSB Special 4.54 2.29 2.49 2.65
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 2.29 2.69 2.79
Median 4.55 2.73 2.99 2.80

Last updated: 7 April 2021 10:22am

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