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, June 21st, 6:39PM

News

rss
Latest Headlines

Home loan report: Relative calm restored for now

The mortgage market has been noticeably calmer over the past week with few changes in rates. After the recent general upswing in loan rates this will be welcome news for anyone who needs to refinance now.

Wednesday, April 9th 2008, 3:47PM

by The Landlord

Relative calm has been restored by reductions in the cost to lenders of wholesale funds over the past couple of weeks. This reflects a little less pessimism in financial markets over the economic picture in the US and also the increasing conviction that cuts are in sight for New Zealand’s official rate.

But none of this necessarily means that there will not be further increases in mortgage rates as individual lenders grapple with the pressures placed on them by the methods they use to fund their loans.


Ian Park, head of retail banking at ASB said that longer term fixed rates might come under further pressure but “a the short end we are probably about there”.

Longer term fixed rates are funded mainly from international institutions which are seeking higher margins on their lending than they were before credit conditions tightened in the second half of last year.

Some large rate gaps have opened up between lenders although some of the lower rates may not remain at current levels. AXA, for example, which shares the lowest rate over two years with Credit Union Baywide, at 9.25%, says its rate is under review. The rate is also restricted to loans of up to 80% of property value. By contrast the highest rate over two years is 10.55% from market newcomer NZMFG Home Loans.  Over five years the range is from 8.95% from AXA, Housing Corp and Silver Fern to 10.8% from Pioneer and Pacific on their “Swift” products.

Mainstream banks are tending to sit in the middle-ground and believe that they are in a good position because they draw funds from a variety of sources, including retail cash deposits, rather than one or two overseas lenders.

It seems likely that the borrowers who will be hit hardest by the rise in mortgage costs are those with histories of arrears, the self employed and others who fall into the general category of “non conforming”. Some of the highest rates in the market now are being charged by lenders who tend to cater for this group and specialist lender Bluestone has effectively suspended indefinitely its lending in New Zealand.

As for rate strategies, ASB’s most recent report on loan rates says that fixing for one to two years is appealing but depends on a borrower’s ability to cope with higher rates should current conditions persist. Westpac recommends hedging risk by splitting the mortgage into a mix of different maturity terms, perhaps with a heavier weighting around two to three years. “With floating rates now firmly into double digits, waiting and seeing is an expensive option."

ANZ and National Bank have meanwhile, confirmed a range of changes to their official lending criteria, including a requirement for a low equity charge on all new loans where the mortgage is 80% or more of the property’s value. The sister banks say they will be “very cautious” in lending at more than 90% and the maximum will be 80% on low-documentation loans.

In the case of property investors, the size and complexity of portfolios, locations of the properties, tenancy rates, and the level of industry experience all have a bearing on applications, say ANZ and National but  “in the current property market, we will be expecting residential property investors to provide a deposit of at least 10% of the property's value”.

« Home loan report: Glimmer of hope?They're off again »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
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 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
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 - 7.14 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 7.74 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 - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 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 6.89 6.55 6.35
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 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
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 7.74 7.09 6.95
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

Last updated: 20 June 2024 10:39am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com