Mortgages

Two year fixed rates best home loan option

Economists currently think short-term wholesale interest rates, and therefore floating mortgage rates, are heading higher, especially since the New Zealand economy has been growing faster than expected and global growth is picking up.

Monday, July 05th 2004

Anthony Byett, chief economist at ASB Bank, reckons variable home loan rates will probably reach between 8.5% and 9% within the next 12 months.

ASB and three of the other four major home lenders currently charge 8% on their floating mortgage rate while Westpac is charging 8.1%.

Bank of New Zealand chief economist Tony Alexander says the Reserve Bank’s Official Cash rate (OCR) could peak at 6.25% "with a risk of something a tad higher.

But that’s the easy bit. The majority of home lending in New Zealand is on a fixed-rate basis.

With longer-term rates more influenced by what’s happening to interest rates globally and particularly in the US, last week’s move by the US Federal Reserve to raise rates for the first time in four years seems to imply longer term rates will also move higher.

Alexander’s advice to borrowers is that fixing for two years currently is the best option.

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Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

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