Home loan interest rates war 'risks another boom'

Wednesday 17 November 2004

The battle for home-lending customers, which has seen the two-year fixed interest rate fall to 6.9 per cent, is unsustainable and risked reigniting the housing boom, bank economists say.

By The Landlord

ASB Bank on Friday lowered its rate to 6.95 per cent to undercut the Bank of New Zealand's market leading rate of 7.15 per cent.

However, the BNZ hit back with 6.9 per cent to maintain its promise of not being undercut till at least December 17.

In reality customers were generally able to get the lowest rate in the market regardless of who they banked with or the advertised rate.

National Bank economist John McDermott said the profit margin on the two-year rate was now so thin that after paying a mortgage broker's commission banks were making a loss.


Read More - Opens in a new window
Commenting is closed

Property News

Return to market form

There’s been a rallying of the market with the latest REINZ data showing both sales volumes and median house prices noticeably up with the onset of Spring.

House Prices

No stopping Capital price rises

There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.

Commercial

NZ proptech start-up scores major investor

Auckland-based commercial property disrupter, Jasper, has raised $2.3 million in seed funding following investment from European asset manager M7 Real Estate.

Site by PHP Developer