Mortgage rates likely to rise

Despite a prediction that the Official Cash Rate will be lowered again this week it seems that mortgage interest rates are likely to rise due to rising international borrowing costs (swap rates).

NZ Herald: Borrowers to face higher home-loan rates

Home loan borrowers look set to face higher fixed-term mortgage rates despite a predicted cut to the official cash rate this week.

ASB increased the fixed-term rates for its three and five year mortgages on Friday and other banks are expected to follow suit.

On August 15 the five year swap rate was 2.08 per cent while on Monday last week it was 2.42 per cent, he said.

The three-year swap rate had risen from 1.98 per cent to 2.23 per cent over the same time.

Those of us with mortgages have had it good for a while now, with record low interest rates. They are down markedly to about half what they were eight years ago.

But this was unlikely to last. We just have to hope they won’t go up much.

9 Comments

  1. Blazer

     /  November 7, 2016

    it looks like the banks are putting up rates because mortgage business has slowed ,and they want to maintain profits and bonus’.What evidence is there of international rates rising and affecting costs.Banks just create loans as an asset on their balance sheet.

  2. Blazer

     /  November 7, 2016

    wheres resident expert PDB with his learned over view?

  3. Alan Wilkinson

     /  November 7, 2016

    Inflation slightly greater than reported due to Stats Dept error:
    http://www.stuff.co.nz/business/86175156/rego-error-at-statistics-nz-complicates-interest-rate-decision-for-reserve-bank

    RB less likely to cut OCR and thereby interest rates.

    • Blazer

       /  November 7, 2016

      ‘On Monday morning Statistics New Zealand blamed a “manual processing error” for its decision to correct its estimate of the increase in inflation in the year to September, from 0.2 per cent to 0.4 per cent.

      The mistake related to how much the agency believed the cost of licensing a small car – commonly referred to as registration or ‘rego’ – had dropped in the September quarter.’NZH.

      so to my mind a drop in rego can hardly be inflationary.What have I got wrong?

      • Alan Wilkinson

         /  November 7, 2016

        Presumably they had overestimated the drop and therefore the inflation rate had been underestimated.

        • Blazer

           /  November 7, 2016

          the reduction in rego rates is not an estimation.I do hope these employees at the Dept are on minimum wage.After all they seem to have minimum ability.

          • Alan Wilkinson

             /  November 7, 2016

            Can you imagine a more boring job? Like being a bean-counter x 10.

      • PDB

         /  November 7, 2016

        Blazer: “What have I got wrong?”

        I don’t think this blog is big enough to keep a complete list Blazer……..

        • Blazer

           /  November 7, 2016

          start with this thread PDB…lets see what you got.