Mortgages

Two-year rates still a good deal: economist

Bank of New Zealand chief economist Tony Alexander is still recommending that borrowers fix for two years, even though this rate has jumped since his bank called a halt to last year’s mortgages price war.

Monday, January 24th 2005

Until December 17, BNZ’s two-year fixed rate mortgages were just 6.9%, but they are now 7.6%.

"When the two-year rate was at 6.9%, it was a complete gimmee and practically everyone should have jumped in and grabbed it – many did, we can pleasingly say," Alexander says.

With the floating rate currently at 8.75%, where it may remain for the rest of this year, it would have to average 6.5% during 2006 to bring the two-year average down to 7.6%, he says.

"We would forsake fixing one year in favour of fixing two years." BNZ’s one-year fixed rate is currently 7.6% too, as is its three-year fixed rate.

Alexander says fixing for three years is likely to be a better deal than floating for that period. "If the floating rate ends up at the usual low point in its cycle of 6.5% come the end of 2007 (and the balance of probabilities says the rate will actually be higher), then it will have averaged about 7.9% over the coming three years."

Read More - Opens in a new window
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

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.