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They're off again

After a couple of weeks' respite, there has been another series of mortgage rate increases over the past few days from non-bank lenders.

Thursday, April 17th 2008, 8:48AM

by The Landlord

There is particular pressure on two-year rates although one lender, Global Home Loans has increased rates across the board.

Louise Ledger, director of Christchurch-based Global said that funder GE had put up its two year rate but that the across-the-board increase in rates were a result of a review of Global’s own margins. The company had not moved its margins for six years but the cost of processing and holding loans had increased in the tightened credit environment.

Global has just launched its first loan aimed at borrowers with past repayment problems. The product has rates set according to the risk indicated by the borrower’s repayment history, ranging from 1.5 percentage points to 4.5 points over Global’s standard floating rate of 10.5%.


Ledger said that the company had been inundated with applications. The launch came at a time when other lenders had withdrawn products aimed at this sector of the market. The Global product was funded by GE.

Rates charged now by several non-bank lenders are significantly higher than those charged by mainstream banks but Ledger said that rates were not the only factor that counted for borrowers.

Meanwhile, economic trends continue to point to generally high rates in New Zealand, quite apart from the pressures on individual lenders and their funding costs. The annual rate of inflation for the year to March, announced yesterday, was 3.4%, a level that has prompted warnings from economists that the Reserve Bank will be cautious about cutting the Official Cash Rate in coming months.

ASB’s latest economic forecast, released today, says that the economy will slow markedly this year but inflation will remain a problem and that the OCR will remain high until early in 2009.

Several economists have noted recently, however, that there is a possibility that rates in New Zealand could tumble hard and fast if the economy deteriorates rapidly. This might persuade those shopping for rates to look at fixing for a year or less but this would be quite a brave move, particularly for an entire mortgage. A less risky strategy would be to spread borrowing over a variety of terms, possibly favouring two-year rates.











« Home loan report: Relative calm restored for nowHome loan report: hope at last »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
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 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
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 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 4.30 4.20 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.45 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 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
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 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 11 November 2019 4:01pm

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