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Home loan rates up and rising

Mortgage lenders have continued to raise home loan rates over the past week and there are suggestions from some commentators that they could go higher still.

Wednesday, March 19th 2008, 12:00AM

by The Landlord

The problem is not that official rates overseas are going up – indeed the US Federal Reserve cut one of the key US rates by 0.75 percentage points days after the depth of the credit crisis was emphasised by the difficulties of banking giant Bear Stearns – but that the rates charged by banks in their everyday dealing with each other are not necessarily following suit. Central banks are trying to encourage borrowing by cutting rates but lenders remain cautious and are charging more, relative what they charged in the past, to cover themselves against what they perceive to be increased risk.

But as the news about financial turmoil overseas gets worse, raising fears of recession in major world economies and possibly in New Zealand, some economists are starting to consider the possibility of lower rates here before too long.

Tony Alexander, chief economist at the BNZ, said in his economic commentary last week that although financial markets still foresaw a good chance of another increase in NZ’s Official Cash Rate, he did not. He went on to outline a scenario that could prompt “some particularly large falls in fixed borrowing rates” and suggest that borrowers fix for only six months or a year.

ANZ in its latest Property Focus commentary said that the bank’s economists had pencilled in rate cuts from the September quarter and believed that “the real risk at this juncture is that the easing cycle is very aggressive, with movements down in 50 basis point clips”.

“However, borrowers need to be aware that this is likely to be slow to filter through to fixed lending rates”.
ANZ said recommended two year fixed rates but suggested that borrowers hedge bets against rates remaining high by putting some debt onto five-year terms.

Among the mainstream banks, floating rates now range from 10.69% at Westpac and on BNZ’s Standard and FlyBuys products to 10.75% at ASB. Over six months, BNZ is charging 9.84% on its Standard and FlyBuys mortgages, ASB and Westpac are charging 9.85% and ANZ and National Bank are charging 9.95%. 

Rates over one year are 9.94% at BNZ and 9.95 from the other banks. Over two years all the banks are charging 9.7% except BNZ on its Standard and Flybuys products which are at 9.69% and on its Classic rate, 9.59%. Over five years, all except BNZ are charging 9.3% and BNZ has a rate of 9.29% on its Standard ad FlyBuys products and is promoting a special five-year rate on its Classic product at 8.88%.  

« Rates up, up and awayOne bank war »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.55 3.89
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 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 ▼4.65 ▼4.80 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 3.97 4.05 4.39
Kiwibank ▼5.15 4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 ▼4.45 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 ▲3.55 3.89
Sovereign 5.30 3.89 4.05 4.39
Sovereign Special - 3.39 3.55 3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.19 4.35 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.39 3.55 3.89
Wairarapa Building Society ▼5.50 ▼3.95 ▼4.05 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.55 3.99
Median 5.34 3.97 4.05 4.39

Last updated: 24 January 2020 8:55am

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