After weaker than expected employment and retail sales numbers were released last week there is a view emerging that the Reserve Bank won’t increase its official cash rate on June 9.
Conversely rates are unlikely to fall based on comments made by the Reserve Bank on May 4.
We have continued to see some softening in longer term rates with a number of providers lowering their four and five year rates in the past week.
Those to lower rates include Bank of New Zealand, HSBC, Loan Plan, Pacific Home Loans and Superbank. Superbank also lowered its six month and three year rates, while Pacific dropped all its fixed rates.
The most significant change last week was that there was only one increase – that was from the National Bank which put its one-year rate up to 7.80%.
Much of the attention this week is focused on Finance Minister Michael Cullen’s Budget which will be delivered on Thursday. The Budget is unlikely to impact on home loan rates, however the government is expected to unveil some initiatives to help first home buyers.
Two year and floating rates remain unchanged from the previous week. Currently two-year rates range from Kiwibank’s 7.50% up to NZ Mortgage Funds which is charging 8.45%.
Three year rates range from Bank Direct at 7.60% to NZ Mortgage Funds which is on 8.38%. However Westpac’s capped rate is 8.45%. The rate charged for a capped rate is the maximum that will apply during the life of the loan. Should rates fall during the loan period then the rate may come down.
To compare home loan rates go to http://www.goodreturns.co.nz/section/200.html
Or visit www.mortgagerates.co.nz
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