Cheapest mortgages could hit 8.5pc

Monday 13 December 2004

The cheapest mortgage rate in the market could keep rising toward 8.5 per cent by the end of next year from less than 7 per cent now, according to a "high scenario" forecast by the Reserve Bank.

By The Landlord

For the first time, the Reserve Bank has forecast average mortgage rates for the next couple of years. It was seen as another shot across the bows of the housing market that interest rates are still heading up, even though hot competition among banks has caused fixed-term rates to fall in recent weeks.

Reserve Bank governor Alan Bollard said yesterday that more official interest rate rises could not be ruled out next year, dashing expectations that rates may dip by the middle of next year.

"There is still a 30 to 40 per cent probability floating mortgage rates are going up before the middle of next year," Bank of New Zealand chief economist Tony Alexander said.

An official interest rate rise could come as soon as late January or the middle of March, which would push floating mortgage rates to 9 per cent, he said.

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.


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