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 LandlordASB 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
It’s full steam ahead for the Stevenson Group’s $800 million, 361-hectare industrial and residential development in South Auckland – despite the uncertainties of the post-Covid-19 era.
Periods of house price decline are rare and "short-lived", says economist Tony Alexander, amid forecasts of a drop of 10%-15% this year.
The Reserve Bank says the commercial property sector is vulnerable to the Covid-19 crisis. But PMG Funds' chief executive believes that while there’ll be short-term pain, the biggest long-term impact will be structural change.