Not a lot of good news for borrowers

Good Returns.co.nz survey of economists shows that none are expecting the Reserve Bank to raise its official cash rate next week.

Sunday, January 20th 2008, 12:00AM

by The Landlord

The majority of the 11 economists surveyed were more than 90% sure that the central bank will, on Thursday, keep its OCR unchanged at 8.25%.

While this appears to be good news for borrowers, that is proving not to be the case.

Fixed rates have been increasing across all terms by around 20 basis points in the past fortnight.

ANZ started this set of rises two weeks ago (January 7) and the last of the big banks, ASB, finally increased its rates this morning.

Instead of making 20 basis point changes to all its fixed rates like most of its competitors it made changes of between nine and 35 basis points.

All these changes are being blamed on international market conditions.

The news for floating rates is not good either. Under normal circumstances lenders move their floating rates in tandem with changes to the OCR.

For the first time in years many of the non-bank lenders have increased their floating rates although the OCR is unchanged and is likely to remain unchanged.

These rate changes are being driven by the non-bank's Australian funders.

Goodreturns.co.nz publisher Philip Macalister says there is no good news for borrowers at the moment.

"None of the rates on offer look particularly attractive, and the outlook is for more rises rather than falls."

To check and compare rates visit the Landlords' Home Loan section

« Rates up, up and awayA glimmer of hope for borrowers »

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