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ANZ hikes short term mortgage rates, including 6 month
ANZ has this morning raised its six month, one and two year mortgage rates by around 25 basis points (bps) as the latest round of hikes shows fixed rate mortgages across the board have bottomed and are on their way up again. This follows a similar move by ASB around a week ago.
ANZ raised its six month rate by 24 basis points to 5.99%; its one year rate by 25 bps to 6.2%; and two year rate by 26 bps to 7.25%. ANZ left its 18 month rate unchanged at 6.69%. See and compare all mortgage rates here.
ANZ also left its variable mortgage rates unchanged. Variable rates are expected to stay low into 2010 as the Reserve Bank of New Zealand (RBNZ) keeps the Official Cash Rate (OCR) on hold at 2.5% until 'the second half of 2010'. However, fixed rates are rising as banks forecast hikes in the OCR from around the middle of next year as the economy recovers and consumers begin to spend more. Banks are also fighting hard for local term deposits which is driving up interest rates. This follows new bank funding guidelines from the Reserve Bank released mid-way through this year.
Banks are being required to raise more funds locally and for longer terms, which has put upward pressure on both term deposit and mortgage rates. See Roger J Kerr's analysis on the RBNZ's new bank funding policy here. Bernard Hickey also talks about this subject in the NZHerald.
The latest moves have led to an increasingly 'positive' yield curve for mortgage rates, where longer term rates are higher than short term and variable rates. This is the opposite to what was seen over most of the last decade and is likely to increase the potency of the Reserve Bank's Official Cash Rate as future changes will flow through faster to the housing market because more borrowers are likely to choose the cheaper variable rates than the longer term fixed rates.
12 Comments
Although long term rates (5
Although long term rates (5 years) have risen since FEB this year from 5.95-6.5% to 8.5-8.75%, I'm surprised they haven't cracked 10% yet as alot of people (including myself) had been been predicting. Six weeks to Xmas! Roll on summer.
wish the banks would offer
wish the banks would offer some better term deposit rates so i could pull my money out of these shakey government guarenteed finnace companies
Early this year after lots
Early this year after lots of hours reading on interest.co.nz I psuedo-adopted myself into Bernard's extended family - yes I became his mythical 'brother-in-law'. I followed his advice, broke out of a 5 yr fixed mortgage, timed it well and paid SFA in break fees, floated for a month or two, then fixed for 5 yrs at 6.49% just before the rates rose again. Thanks Bernard for saving me a shed load of money and time.
Ditto! Except it cost me
Ditto! Except it cost me around $4,500 to break, but will save me $20,000+ over 5 years based on rates @ 8.5%. If mortgage rates rise above this - quite likely - the savings will be even greater. Thanks Bernard!
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Friend wanted to buy first
Friend wanted to buy first home late last year, but after spending lots of hours on this website decided to wait for house prices to drop 40%. He realized it will never happen and few months ago bought his house. Thanks to Bernard he lost some 40k.
Thank you Bernard, on his behalf, and many others
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That's bloody typical of the
That's bloody typical of the Kiwi mentality , blame someone else for his/her own mistakes . Tell your friend to grow a spine , and take responsibility for their own decisions . Did your friend add 10 % to Bernard's 30 % predicted drop ? And did your friend not see the howls of protestation by many here , against Bernard's prediction ? After " spending lots of hours on this website " it should have been blindingly obvious that Bernard's view was controversial .
I phoned an 0900 psychic
I phoned an 0900 psychic line for my lotto numbers, but I didn't win. Who can I go to for complaint?
Allen - It seems very
Allen - It seems very unfair to blame Bernard for the situation you describe. I am on record as having suggested that the 'billion dollar' Kiwi house is not inconceivable - but this is only because I believe our wonderful leaders will ultimately wind up monetizing all debt.
Had market forces been allowed to do their cleansing work then Bernard's apparent 40% price drop prediction would have been far too conservative. Its hardly his fault that we are governed by the most irresponsible bunch of politicians - both here and overseas - since the lunatics who administered the Weimar Republic.