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Thread: Interest Rates

  1. #5321
    Join Date
    Jun 2004
    Posts
    9,197

    Default

    Quote Originally Posted by eri View Post
    OCR may stay at 1.75pc until 2020


    but banks will keep raising mortgage rates anyway

    http://www.stuff.co.nz/business/8922...review-of-2017
    And they shouldn't because?
    What is the relationship between the OCR and mortgage rates?

  2. #5322
    Join Date
    Sep 2007
    Location
    Auckland
    Posts
    6,991

    Default

    Banks profits down a bit for the first time in 7 years.

    http://www.nzherald.co.nz/business/n...ectid=11800844

    It has amazed me how we had a GFC and the banks started making more and more money just after that occurred.

    They've been absolutely creaming it for 7 years.

    Should have bought some bank shares back then!

  3. #5323
    Join Date
    Sep 2008
    Location
    Tauranga
    Posts
    1,380

    Default

    ASB profit UP 6%.
    The new down is up.

  4. #5324

    Default

    Is this fake news or alternate facts... I can't keep up

  5. #5325
    Join Date
    Sep 2008
    Location
    Tauranga
    Posts
    1,380

    Default

    Quote Originally Posted by Don't believe the Hype View Post
    Is this fake news or alternate facts... I can't keep up
    Depends if you are a righty or lefty.
    Left is always right but right is wrong.
    Oh that's about men's earings I think.

  6. #5326

  7. #5327

    Default

    Maybe I am naive and don't understand our banking system well enough but.. Considering a large portion of our banks are Austrlians owned - one would expect to have similar interest rates to our Australian cousins?

    Why is it almost all of Austalian floating rates are significantly under 3.8%, while ours are upwards of 5%.
    Last edited by Camu; 18-02-2017 at 08:24 AM.

  8. #5328
    Join Date
    Apr 2005
    Posts
    2,484

    Default

    Quote Originally Posted by Camu View Post
    Maybe I am naive and don't understand our banking system well enough but.. Considering a large portion of our banks are Austrlians owned - one would expect to have similar interest rates to our Australian cousins?

    Why is it almost all of Austalian floating rates are significantly under 3.8%, while ours are upwards of 5%.
    I'm guessing that it's about flows of money.
    And that money isn't free to flow between Australia and New Zealand in quite the way you think.
    If we had a common currency and common laws and government, ie Australia was a district of New Zealand, then your thinking would have some grounds.

  9. #5329

    Default

    Quote Originally Posted by McDuck View Post
    I'm guessing that it's about flows of money.
    And that money isn't free to flow between Australia and New Zealand in quite the way you think.
    If we had a common currency and common laws and government, ie Australia was a district of New Zealand, then your thinking would have some grounds.

    I understand that, but, the Aussie banks are claiming overseas funding is the sole reason, or very large portion of it, for our recent increase in interest rates. Surely there is more to it than they are letting on - especially after their profits are increasing. If they are just passing on their "cost of borrowing" surely their profit should remain similar to any other year?

    I believe we do have a common currency though, in USD terms we are almost identical. Or laws and government are different and I don't know anything about the Australian system.

    Anyhow, just a Saturday morning thought. I'm probably barking up the wrong tree. It's interesting to see other peoples points of view though!
    Last edited by Camu; 18-02-2017 at 09:45 AM.

  10. #5330
    Join Date
    May 2012
    Posts
    239

    Default

    It's entirely consistent with what they're saying, though.

    In Australia, they may have a much larger domestic funding source, so don't have to borrow internationally. In NZ, we have a comparatively smaller domestic funding source, so have to borrow more internationally. Hence higher prices.

    Not saying this is the actual situation, but it's a pretty obvious way to interpret what they're saying.


 

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