ANZ is lifting mortgage rates following Wednesday's 25 basis points Official Cash Rate (OCR) hike by the Reserve Bank.
They are raising their floating rates by the full +25 basis points of the OCR increase.
That will take ANZ's Standard floating rate to 5.04%, up from 4.79% previously. Their revolving credit rate will rise to 5.15%.
Blueprint to Build is a discount off the floating rate
At the same time, they are raising some savings account interest rates by +25 bps as well. For example, ANZ's Serious Saver account rate will rise to a potential rate of 0.70%.
They are expecting more rises. A spokesperson said: "As the Reserve Bank moves to rein in inflation and bring some balance back to the economy they have signalled the OCR would continue to rise, potentially to around 3.4% by late 2024. If that happens, interest rates for lending and savings are likely to continue to rise too."
ANZ's new rates will be effective from the following dates:
| Home lending Floating | New Loans | 1 March |
| Existing Loans | 15 March | |
| 'Blueprint to Build' (2.76% discount) | New loans | 1 March |
| Existing loans | 15 March | |
| Home lending Flexible | New Loans | 15 March |
| Existing Loans | 15 March | |
| Business floating | New Loans | 1 March |
| Existing Loans | 15 March | |
| Business overdraft | 15 March | |
| Serious Saver | 1 March |
It is likely that all other banks will follow with similar increases, and soon.
40 Comments
so
loan 800000 per 30 years => house price 1000000
4.79% = 4,192 monthly
5.04 => 4,314 monthly
assuming the bank will preapprove on the same basis (you can afford 4,192 monthly)
then the total mortgage amount should be: 777,400
difference is 22600
=> down pressure total 2.8%
this is not taking in consideration the difference eventuate in the initial deposit
more to come?
lucenera
It is commonly referred to as a "stress test" rather than "affordability".
They have a higher rate than the loan rate that they test your ability to service the loan if mortgage rates were to go that high. Recently it has been around the 7% but it fluctuates at their discretion - its them being prudent in the event that interest rates go higher.
Note that it is a "stress" test - as with other stress tests, it is about your ability to withstand that level before breaking. With stress tests there will be considerable strain prior to reaching that point - for a mortgage holder that means really cutting back on expenditure.
lucenera
From what I am currently hearing is that banks are applying a considerable range of criteria to mortgage applications compared to this time last year. In addition to the main criteria last year (e.g. LVR, income, and “stress test”) banks have not only increased the thresholds, they are also considering a whole raft of other factors including spending patterns, greater attention to job security, discounting rental income, age etc. Anecdotally from a couple of very active investors I know, I’m hearing that applications that they could feel confident about last year are being outright rejected.
yup, I was expecting something like that.
My preference would be that banks make more "public" these criterias, like with a simulation app. I don't see it difficult (assuming they already have something like that internally).
f(age,salary/ies, status, etcs) => you can ask for XXX
What I saw so far are very far fetched mortgage calculators that state that you can afford 3 millions but in reality they can give you 300k
These are called "test rates". ANZ was down at 5.8% last time I checked. A few years ago they were at 7%.
Last I heard, they were still at 5.8%, but might have increased lately.
They aren't fully public, but if you search hard enough you can usually find them.
This article from a while ago notes that it decreased to 5.8%.
https://www.goodreturns.co.nz/article/976517265/anz-eases-servicing-tes…
Yes 'very sticky' as people 'want' to be paying the ludicrous prices :P
Free falling... Look at the Tesla chart. Very much reminds me of last housing boom 5 years ago and the current one (zoom out to 5 years and look at the past 2-3 years): https://www.tradingview.com/symbols/NASDAQ-TSLA/
Like what? Full self driving cars by 2018, 1 million driverless taxis by 2020, the electric semi truck by 2019, the cyber truck by 2021, all products which you still can't buy. Musk simply makes wild promises like the monorail guy in the simpsons, tricking investors out of their money. He seems to tell lies as big as Elizabeth Holmes, yet somehow gets away with it.
Agree, except with your Elizabeth Holmes comparison. He does occasionally deliver a promise or two, enough to keep investors happy and keep the company out of bankruptcy. Like the model 3/Y, if he hadn't delivered that (even late and at higher cost) then they would have been bankrupt a few months later.
All you need to do is order properties by price on trademe, and you can get an idea of what the agent has entered into the 'expected sale price' field by looking at the property above and below that has a price on it. So no special tools are needed, as trademe allows people to see this already. I think other property websites allow the same thing. However some agents seem to list lower amounts in that field to get a listing to people in searches for lessor amounts. IMO agents should be entering their true expected sale price.
These are called "test rates". ANZ was down at 5.8% last time I checked. A few years ago they were at 7%.
Last I heard, they were still at 5.8%, but might have increased lately.
They aren't fully public, but if you search hard enough you can usually find them.
This article from a while ago notes that it decreased to 5.8%.
https://www.goodreturns.co.nz/article/976517265/anz-eases-servicing-tes…
RBNZ released a statement on test rates in November last year.
They said: "The weighted average test rate across the industry is just over 6 percent."
Which means there are a lot of mortgages that have been tested at under 6 percent. If inflation keeps up, it won't be long until we get to see just how robust the "tests" were.
I know a few people who took advice from their mortgage brokers and told the bank that they had a boarder when they didn't. Might be a real boarder shortage soon. Bet that liar loans are very very common.
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