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Mortgage borrowers hedge their bets on OCR coming down soon

The one-year fixed interest rate is the most popular for mortgage borrowers as economists continue to pick this November as possibly when the RBNZ might lower the OCR.

Wednesday, May 8th 2024, 11:02AM

The central bank says it won’t probably start cutting the official cash rate until the mid-next year, but some bank economists and the financial markets think otherwise.

The ASB and ANZ have recently reduced their mortgage rates. ANZ, the country’s biggest bank, took 10 basis points off its six-month and one-year fixed home loan rates.

RBNZ data for March shows the one-year fixed term accounted for 42.1% of all new owner-occupier lending, up from 38.9% in February.

This is the highest share of new owner occupier lending on one-year fixed terms since June 2021 when it hit 43.6%.

Eighteen-month terms are also popular with borrowers and the number taking out mortgages at this rate have risen from 9.8% to 13.0%.

Hedging their bets on interest rates declining from the end of this year, borrowers have shied away from two and three-year fixed interest terms, which have dropped to historical lows of 10.2% and 3.3% respectively.

Four-year fixed terms held steady last month and are at a historical low of 0.3%.

The same goes for residential investor lending. Although in the doldrums, compared to the 2021 peak when investors were knocking first home buyers out of the market, total lending rose to $1.3 billion last month and 45.7% of that was on one-year fixed term, up from 41.4% in February.

The share of total new residential lending on fixed interest rates rose to 81.7% last month, up from 79.9% in February.

Total monthly new residential lending was $5.7b, up 23.4% from $4.6b in February.

Compared to March last year, the total monthly new residential lending was up 0.5% from $5.7b.

The share of owner occupier loans on floating terms dropped to 17.5% last month after an eight month high of 19.5% in February.

Similarly, the share on six-month fixed terms declined to 12.6% after a historical high of 15.1% in February.

New residential investor lending on six-month fixed terms dropped from a previous series high of 19.9% in February to 16.9% last month.

Tags: OCR

« Difference in scores a reflection of banking studyBusinesses holding up OCR cuts »

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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: 19 June 2024 3:59pm

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