Fixed home loan rates dropping

[donna]

They're up, They're down!

Here's the latest:

Big banks are slashing some interest rates in a war to win customers, just as the Reserve Bank warns again that some homeowners might struggle if interest rates rise. Yesterday, ANZ Bank dropped its two-year fixed-term rate for home loans half a per cent to 7.35 per cent, to be "competitive".

http://www.stuff.co.nz/stuff/sundaystartimes/auckland/0,2106,3070951a6467,00.html

Cheers,

Donna :P

[fudosan]

Hi Donna,

I understand longer fixed terms are really controlled by the international fund markets, particularly the US, but not by our Reserve Bank. The US 10-year bond, for example, remains low at about 4.22%, after hitting a high at 4.86% back in May. For this reason, Allan Bollard, mandated to limit inflation to 3%, has to raise the OCR much higher to make its effect felt by borrowers.