Header Ad Module



No announcement yet.

Interest Rates

  • Filter
  • Time
  • Show
Clear All
new posts

  • Wonder is the next OCR (Possibly cut of .25 to .50 points) would make any difference to the rates..


    • Originally posted by markw1 View Post
      Wonder is the next OCR (Possibly cut of .25 to .50 points) would make any difference to the rates..

      MY bet is it would make absolutely no difference................... As some commentators are predicting already the RB will probably hold rates next week so as to give them time to assess the effects of the cuts so far. With the OCR at 2.5% the RB only has room for one or 2 more downwards moves. As I understand it once the OCR hits 2% the RB has run out of Ammo
      The mission of any business enterprise should include the aim to develop economic conditions rather than simply react to them.


      • it makes sense to me to leave rates alone at the moment

        the market is still absorbing the unprecedented drop over the last year

        any further cuts will change very little but will eat into the size of any future cuts

        on these pages i see rabo bank is offering 4.3% for 3months. nz and oz banks can't afford to lose term deps to them and still strengthen their positions as required by gov.
        have you defeated them?
        your demons


        • BNZ raises fixed mortgage rates

          June 6th, 2009 BNZ has announced a wide-ranging series of rate changes for its mortgages, mostly increases to fixed rates for terms of one to seven years.
          However, it has pulled its one year Classic home loan offer and the 5.49% discounted rate that went with it, although it is anticipated it will release a new Classic offer on Monday for an 18 month term.
          It has also reduced its Total Money variable rate to 5.99% from 6.25%, matching Kiwibank’s variable rate.

          The increases in fixed rates range from +0.20% for their 1 year fixed offer, to +0.49 for their five year fixed offer. These changes follow ASB’s market-leading fixed-rate increases, and in some cases exceed the ASB price positions.
          BNZ is the only bank to offer fixed rate contracts longer than 5 years, with their seven year offer now priced at 8.50%
          It is expected most other banks will follow next week, with longer term fixed rate offers increasing in response to recent wholesale money cost rises, driven by international benchmarks.


          • Interest rates keep climbing as more banks lift to 8pc

            New 12:30PM Monday Jun 08, 2009
            Three more banks raised longer term mortgage rates over the last three days, following increases by ASB last week that saw it become the first bank in New Zealand to raise its five year mortgage rate back to 8% this year.
            Longer term mortgage rates in New Zealand have started to rise again as international wholesale rates rise due to concerns of heavy government borrowing by the likes of the US and UK as they print money to buy back government bonds.
            On Friday afternoon, BNZ raised all of its standard mortgage rates one year and over by between 20 and 49 basis points (bps). Notable moves were the one year rate, up 20 bps to 5.99% while other banks are still offering one year rates around the 5.50% mark; and the five year rate, up 49 bps to 7.99%. BNZ also raised its seven year rate by 31 bps to 8.60%.
            BNZ also introduced a new 'Classic' home loan offer, dropping its 5.49% one year offer and replacing it with an 18 month rate of 5.99%. However the new 18 month rate is still currently trumped by offers from other banks, including 5.79% from ANZ National.
            Despite the rise in long term rates, BNZ dropped its Total Money variable mortgage rate by 26 bps to 5.99% to match Kiwibank.
            TSB was next to move on Saturday, dropping its six month rate but raising three, four and five year mortgage rates.
            The two notable moves were its six month rate, down 14 bps to 5.50%; and five year rate, up 35 bps to 7.95%.
            On Monday morning Kiwibank followed TSB's footsteps, raising its five year rate by 35 bps to 7.95%.


            "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


            • ANZ, National lift mortgage rates

              By ADRIAN CHANG - BusinessDay Last updated 15:35 09/06/2009

              The ANZ and National banks lifted their long-term fixed mortgage rates today, bringing themselves in line with most of the other major New Zealand banks.
              ANZ's three year fixed rate mortgage is now 6.99 percent, up from 6.85 percent, while its four year rate is now 7.5 percent, up from 7.4 percent. Its five year rate is now 7.99 percent, up from 7.85 percent and its 18 month rate is now 5.89 percent, up from 5.79 percent.
              National's three year rate is now 6.95 percent, up from 6.85 percent, its four year rate is 7.55 percent from 7.15 percent, while its five year rate is now 7.95 percent, up from 7.85 percent. Its 18 month rate is now 5.89 percent, up from 5.79 percent.
              ANZ and National, sister banks, last raised their rates two weeks ago on May 28. Their rates are now roughly in line with the rates offered by ASB, BNZ and Kiwibank, who all recently raised their long-term fixed mortgage rates.
              Westpac remains the only major bank not to have raised its long term rates in recent weeks.
              The moves will likely vex Reserve Bank governor Alan Bollard, who is due to review the Official Cash Rate on Thursday, and said at the previous review when he cut the OCR by 50 basis points to 2.5 percent, he would like to see mortgage rates fall.
              Since then, floating or short-term fixed rates have remained almost entirely static, while long-term rates have crept up towards - and in some cases surpassed - 8 percent per annum.
              The last time fixed mortgage rates were at the 8 percent level was in November last year, when the OCR was still at 6.5 percent.
              Bank economist have previous suggested long-term mortgage rates have become decoupled from the OCR, as the cost of funding is influenced more by the banks' offshore borrowing and long-term deposit rates than by the overnight rates controlled by the OCR.

              "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


              • BNZ 2's year rate at 6.50% which is well above other banks at 6.09 to 6.30%. Will the other banks meet this or will BNZ have to drop its 2 year rate? Anyone got info on the 2 year wholesale rate?



                • Oh dear, oh dear. What will
                  the hawser stanchion say?
                  Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!


                  • I'm finding it impossible to find swap rates - interest.co.nz update occasionaly (once every 3 days). Does anyone know a good reliable source for these?

                    Last update on Interest.co.nz showed a downward drop across 3 - 5 years (but only minor)


                    • I believe this site( and page) gives current NZ swap rates ( If I am wrong some one will enlighten us I am sure:


                      I have read with concern that NZ MPs are getting into the act saying mortgage interest rates are too high. As some one with cash in NZ I disagree. I have a 6 figure sum on term deposit and there is no way I would tolerate getting a lower interest rate than the one I am receiving now.
                      The mission of any business enterprise should include the aim to develop economic conditions rather than simply react to them.


                      • Staying short the best strategy

                        By PHILIP MACALISTER Last updated 13:46 12/06/2009

                        OPINION All the attention on long-term home loan rates last week was meaningless.
                        So what if the five-year fixed rate has now hit the 8 percent mark, which is around its average over recent history?
                        The reality is that fixing for that length of time at that rate is madness - unless you think it's a good deal and like to know the certainty of interest rate payments over the next five years.
                        Currently the best borrowing strategy is clear. Go short (floating or up to 12 months) and stay there.
                        As our rates table shows, six-month rates are the lowest-priced option in the market by a considerable margin at present.
                        The Reserve Bank governor Alan Bollard would like to see them come down some more, but as this earlier post says, the central banks and politicians are impotent on this front.
                        The stay short strategy makes sense and fits with what the Reserve Bank is saying.
                        Its clear message at this week's Official Cash Rate announcement was that we are at the bottom of this interest rate cycle. It's unlikely rates will go lower, and if they do don't bet that home loan rates will tumble too.
                        It's been a bit of a no-brainer what to do, and even what to do in the short term. The tricky part of borrowing is what strategy to adopt when rates start rising.
                        If you think that Bollard gave a guarantee that short-term rates will stay low till the end of next year - be careful.
                        Rates will rise and they could rise more quickly than predicted.
                        When this happens the decisions will be tougher to make.
                        Prudent borrowers should be considering all the options at the moment and have plans to deal with them in case the unexpected happens.
                        *Philip Macalister is the managing director of Tarawera Publishing.

                        Last edited by muppet; 12-06-2009, 03:39 PM.
                        "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


                        • TSB cuts home loan rates to under 6pc

                          6:00PM Thursday Jun 18, 2009

                          TSB Bank hopes its new rates will stimulate demand for home loans.

                          TSB Bank is cutting its two-year fixed home loan rate to 5.99 per cent to stimulate demand for home loans.
                          The Taranaki-based trust-owned bank, which returns its profits to the community, said it funds its mortgage lending entirely from deposits, which have been increasing.
                          Managing director Kevin Rimmington said the bank was unaffected by the comings and goings on worldwide financial markets, and was determined to pass the benefits of this on to New Zealanders.
                          The reduction comes a day after the latest round of bank bashing by Reserve Bank Governor Alan Bollard. Bollard said he was disappointed that banks had not passed on the April reduction in the official cash rate to short-term lending rates.
                          "They have an opportunity to help New Zealand's recovery by doing so," Bollard said.
                          Rimmington said the two-year fixed rate was effectively the bank's benchmark mortgage lending product.
                          It was being cut because "we are getting a lot of funds into the bank" and "we have to get it back out again".
                          "Right now, we're experiencing record levels of funds growth."
                          TSB's deposit rate for two years is 5.25 per cent and the one-year rate is 4.6 per cent.
                          Rimmington said that up until about a month ago the bank's margin on lending was the lowest it had ever experienced.
                          Australian-owned banks operating in New Zealand have argued that their funding costs have risen, particularly in global markets, so they can't pass on all of the cuts in the official cash rate.
                          The official cash rate has been cut from 8.25 per cent to the current 2.5 per cent.
                          Reuters reported that New Zealand swap yields firmed across the curve today, with two-year swaps up 4.5 basis points to 3.79 per cent and five-year swaps up five basis points at 5.25 per cent. These yields influence the pricing of mortgages.
                          The website interest.co.nz shows that many two-year home loan fixed rates are around 6.25 per cent. Kiwibank offers 6.09 per cent and TSB Bank was at 6.19 per cent prior to this cut.
                          Up to 65 per cent of TSB Bank's assets go into providing home loans. The bank has nine branches outside Taranaki.
                          - NZPA
                          "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


                          • Comment from Tony in this week's newsletter as to why interests rates are as high as they are.

                            Reserve Bank Clouds The Picture Again
                            Again this week the Reserve Bank Governor said “…, we are disappointed that banks have not passed on
                            the April reduction in the OCR to short-term lending rates: they have an opportunity to help New Zealand's
                            recovery by doing so,"
                            So lets explain the dynamics yet again. We do not fund a single loan to our customers by borrowing from the
                            Reserve Bank at the official cash rate – whether that rate be last year’s 8.25% or the current 2.5%. The only
                            time the cash rate is relevant is when we need to borrow money from the RB to balance our account with
                            them at the end of the day. The money gets paid back the next day usually.
                            We fund our lending by borrowing about 60% of the money we (you) need within New Zealand and the other
                            40% offshore. The cost to us of borrowing to make a five year fixed loan has risen from a swap rate of 4.1%
                            plus risk premiums back in February to 5.3% plus premiums now.
                            The cost to us of domestic funding as represented by the 90-day term deposit rate has risen from 3% back
                            in early March to around 3.5% now. The current deposit rate is 1% above the official cash rate. A year ago it
                            was over 1% below.
                            Interestingly, at the same time as the RB fails to point out that we banks fund at rates other than the OCR,
                            they are also suggesting we boost our profits to ensure sufficient reserves are set aside to handle expected
                            losses from the farming sector. And in fact the RB have circulated a proposal that would force us banks to
                            charge farmers more than we currently do when we lend to them.
                            And perhaps the RB would do a better public service by pointing out that the pass-through of the official
                            cash rate’s cuts in New Zealand has been far greater than some countries offshore. US mortgage rates have
                            fallen between 1% and 2% (now rising again though) over a period of time when the Fed.’s funds rate was
                            reduced 5.25%. Cuts here amounted to around 4% for floating mortgage rates for 5.75% worth of cuts.
                            But one needs to be fair and note that across the ditch over a period of time when the RBA cut its cash rate
                            4.25% down to 3%, average bank floating mortgage rates fell 3.85% to 5.75%. That sounds good, but it
                            should be noted that in the five years ending December 2007 the average gap between the Aussie cash rate
                            and floating mortgage rates was 1.8% and it is now 2.75%.
                            "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


                            • Dosnt seem to be any movement at all except with TSB 2 year rate.


                              • http://www.nzherald.co.nz/business/n...0581450&pnum=0

                                Hong Kong mortgage war 'killing' banks

                                4:00AM Tuesday Jun 30, 2009
                                By Kelvin Wong

                                Hong Kong high school teacher Chris Poon's dream of buying his first apartment was dashed in December when banks refused to fund more than 50 per cent of the HK$3.5 million ($702,633) purchase.
                                Poon, 33, tried again in May and got a loan covering 70 per cent of the price for the 65sq m apartment in Hong Kong's Sai Wan Ho district from BOC Hong Kong (Holdings).
                                The mortgage rate was 2.25 per cent, down from the 3.5 per cent that Poon was discussing with lenders last year.