Interest Rates

[muppet]

Hi Guys

Kiwi Bank is offering 6.99% fixed for 5 yrs for refinacing as from yesterday for a limited time.

Love and Kisses xxxxxxxxx
Muppet

[mortgagerates]

Kiwibank tries to stir some action
Weekly Home Loan report: Kiwibank made the most interesting change to its home loan rates last week, dropping its five-year rate a full 51 basis points to 6.99%.

This is one of the lowest rates in the market for any rate at the moment, showing how inverted the yield curve is. It’s also interesting as not a lot of business gets written on the very long rates.

If the move was designed to set off a bit of a price war in this part of the market it has, so far, failed. None of the other lenders researched by www.goodreturns.co.nz have matched it.

One point the change does illustrate is that Kiwibank has been much more aggressive in its pricing strategy at the moment.

When the first rate war broke out in the last quarter of 2004 Kiwibank chose not to participate fully. Subsequently it has been shown that Kiwibank suffered with reduced market share.

This time around when the BNZ started cutting rates, Kiwibank has been one of the more active participants in matching it on a head-to-head basis.

Recently it had been matching or bettering what BNZ was offering in the two and three year fixed rate market.

With interest rates remaining remarkably stable, and an official cash rate review just around the corner (July 2 there has been little movement in home loan rates during the week.

The only changes, aside from Kiwibank, were to Equitable's First Equity Loan, where the one and two year rates went up 10 points to 7.91%, and Loan Plan which upped its one year rate and dropped its four and five year ones.

The National Bank moved this morning dropping its four and five year rates and lifting its six-month rate.

Five year rates currently range from Kiwibank's 6.99% up to NZ Mortgage Funds on 8.21%. The second lowest rate is 7.40%.

Two-year rates range from 7.45% (BNZ, Kiiwbank and Bank Direct) up to GEM's 8.40%.

To compare rates go to http://www.goodreturns.co.nz/section/200.html

[muppet]

Hi Guys

BNZ have done some minor tweeking this morning.

6mth and 1yr rates up to 7.9%
4yrs down to 7.5%
5yrs down to 7.4%

Regards

[jumbo]

There's been a whole raft of changes this morning in, mainly from non-bank lenders. The following is a wrap up of what has been happening

It was the turn of banks to move interest rates last week. The major talking point at the moment is Kiwibank’s five-year rate of 6.99%, which is well-below the historical average for five-year rates (around 7.77%).

While the rate has received some publicity it hasn’t provoked too much reaction from competitors.

The only significant changes in the four and the five year fixed rate market has been National Bank and BNZ dropping their rates between 10 and 20 points to the 7.40%-7.50% range.

Both banks also put up short term rates. National Bank last week put up its six-month rate to 7.90%. Bank of New Zealand, yesterday, put up its six-month and one-year rates to 7.90%.

NBNZ also withdrew its special 21-month rates yesterday.

Today there has been a flurry of changes from a variety of non-bank lenders. The main trend amongst these changes has been towards lower two-year rates. You can see the changes on this page http://www.goodreturns.co.nz/section/200.html with green arrows denoting falls and red ones rises.

The Reserve Bank’s official cash rate review is scheduled for Thursday July 28.

Current expectations are that there will be no change to the OCR and the bank will drop its tough talk about more rises being possible.

[muppet]

Hi Guys

This week's newsletter from http://www.goodreturns.co.nz

Where to for rates
The Weekly Home Loan report looks at where mortgage rates are heading.
Tuesday, 02 August 2005

With little few changes in home loan rates recently much of the focus at the moment is on where rates are heading.

This theme has been strengthened since the Reserve Bank’s official cash rate announcement last week. As expected the bank’s governor left the OCR unchanged at 6.75% and the tone of it was slightly softer than in previous announcements.

This has led to speculation that the next change – whenever it comes – will be a cut in rates, thus lower home loan rates.

However a number of economists are warning people not to be presumptuous about a pending cut. The picture emerging is that a cut – when it comes is still many months away, and in the meantime don’t rule out the possibility of yet one more rise.

As one economist noted rates go up quickly when the OCR increases, but are slow to come down with the falls.

Generally rates are sitting above their historical averages.

One of the reasons why there have been few significant rate changes in the past couple of weeks is that the interest rate market has remained reasonably static.

As noted the OCR remains the same, which would mean no movements in floating rates.

However, Public Trust defied that rule last week when it cut 15 basis points off its floating rate to bring it down to 8.75%.

"We are building up our home lending business and this competitive rate signals to the market that we are looking for business,” Public Trust chief executive Pat Waite said last week.

While the floating rate is lower than the main banks and Kiwibank, it is not the lowest in the market.

Longer-term rates are influenced by the offshore money markets. These too have been quiet but there are decisions due soon from the Reserve Bank of Australia, Bank of England and European Currency Board.

Any changes here could move rates in New Zealand.

What’s the best deal?
In terms of duration – that is what term your loan should be – there is a range of views. Westpac says fixed for 12-18 months so you can refinance when rates start falling. Bank of New Zealand says fix for two to three years, while ASB says fix for “two to five year fixed rates would be useful, especially for lenders with little tolerance - financial or psychological - for any upward interest rate shock.”

With fixed interest rates flat in the market there is little difference between standard rates on offer, but there are still a number of special rates around.

Discounting is most prevalent in the two to three year fixed rate market and Kiwibank is still offering its five-year rate of 6.99%.

Regards

[muppet]

Hi Guys

There has been some interest rate moves in the last few days.

BNZ:
2yrs 7.6%
3yrs 7.5%

BankDirect:
6mths 7.8%
1yr 7.8%
2yrs 7.5%

National Bank:
6mths 8.05%
1yr 8.05%
2yrs 7.85%

Regards

[muppet]

Hi Guys

More upward movements.

ANZ
6mths 8.05%
1yr 8.05%
2yrs 7.80%

ASB
1yr 7.95%
2yrs 7.70%
4yrs 7.50%

Funnily enough the Bank that is usually first out of the blocks - Westpac - hasn't moved.......yet!

Regards

[roseneath_rat]

Much of this is probably returning to normal margins, the 90 day rate hasn't moved much lately.

Interesting with the US Fed having moved up again this week. The BNZ Economy report is predicting a 50/50 chance of an OCR increase next time around.

[muppet]

Hi RR

The 90 day rate has risen more in the last week than it has all year.

Gone from about 7.03% up to 7.13% and appears to be going higher.

Might be a case of hang on with both hands.

Regards

[tricky]

Or watch the BNZ:

BNZ relaunches unbeatable campaign
23 September 2005

Bank of New Zealand has relaunched its Unbeatable home loan promotion, offering to beat the fixed term interest rate on offer by any of its major competitors.

The offer applies to the bank's Classic Home Loan for terms from six months to seven years and starts from tomorrow.

BNZ first launched the Unbeatable campaign in the fourth quarter of last year, sparking an intense mortgage price war amongst the major banks.

After taking a breather in January, the campaign was relaunched in February and ended again in May.

The bank's fixed interest rates currently range from 7.90 per cent interest on 6-12 month deals, down to 7.6 per cent for anyone willing to fix for 7 years.

[fudosan]

With 5-yr fixed trending down, banks must be betting interest costs will drop over the medium term.

[muppet]

Hi Guys

Westpac has finally joined the rush and followed everybody else and raised shorter term fixed rates.

1yr fixed now 8.10%
2yr fixed now 7.85%
3yr fixed now 7.70%

Regards

[roseneath_rat]

With 5-yr fixed trending down, banks must be betting interest costs will drop over the medium term.

Yes the expectations are still for interest rates to ease longer term. Its the short term inflation shocks that are keeping swap rates high in the mean time. If you look at the 90 day rate relative to the OCR everyone is pricing in a rate increase next round.

Most main banks are expecting easing around mid-late 2006 now.

[muppet]

Hi Guys

Interest movements already this week.

BNZ have raised most of their rates.
6mths and 1yr rates to 8.05%
2yr rates to 7.8%
3 and 4yr rates to 7.65%
5yr rates to 7.5%

ASB have dropped their 5yr rates to 7.4%

Regards

[muppet]

Hi Guys

Westpac and the ASB have moved their rates .

Westpac
1yr 8.2% up
2yrs 7.99% up
3yrs 7.9% up
4yrs 7.8% up
5yrs 7.59% down

ASB
6mths 8.15% up
1yr 8.15% up
2yrs 7.9% up
3yrs 7.75% up
4yrs 7.6% up
5yrs 7.4% down

Kiwi Bank, Bank Direct and TSB have also had some changes upwards.

Regards