Quiet before the storm?

A quiet month after the equally quiet Christmas period: the most notable event during Janurary was of course the surprise increase in the OCR by the Reserve Bank. However, as this came at the end of the month, the real impact will be seen in February.

The latest mortgage interest rate survey conducted by Good Returns (www.goodreturns.co.nz), shows little movement for floating rates for the first month of 2004. As a recent story by Good Returns noted however, Kiwibank was very late in responding to a rise in wholesale rates back in November when it finally increased rates from 6.55% to 6.75% last month. Regardless its floating rate is still 45 basis points lower than the lowest of the major home lenders.

The spread in interest rates at the end of the month was also significant: the highest floating rate on offer as at 31 Jan 2004 was 7.95% while the lowest was 6.55%.

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