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20% of Kiwi’s prepared to skip mortgage repayments

Thursday, June 3rd 2010, 12:06PM

Two lenders made small changes to their short-term fixed mortgage rates this week which you can check out in our table here.

In news, a "staggering 20%" of New Zealanders say they are prepared to skip a mortgage repayment over the next year if they run short of cash, according to a new study. Is this something you would do? Read the story here and leave a comment.

The next Official Cash Rate (OCR) review by the Reserve Bank is in a week's time and there is a mix of views as to whether the OCR will be raised from its historic low of 2.5%.

The New Zealand Institute of Economic Research says interest rate hikes should be left until September. However according to Expert Views, if there was ever a reason why the Reserve Bank should start raising its cash rate sooner rather than later, this week's National Bank Business Outlook (NBBO) Survey was it. BNZ's Tony Alexander also looks at what conditions are needed if there is to be an OCR hike.

See our graph to find out economist predictions of what will happen with OCR hikes over coming months.

 

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Latest Trends
Fixed rates step into spotlight

The gap between floating rates and fixed rates is closing in. This is because floating rates have been increasing in synch with the last two Official Cash Rate (OCR) increases of 25 basis points, making an increase of 0.50% since June. At the same time there has also been a fall in two to five year fixed rates due to the decline in wholesale and swap rates.

Whereas six months ago the "step up" between floating and two-years fixed was around 1.60%, at the moment it stands at around 0.60%.

This means at the moment you would only need to see a small rise in rates for the fixing strategy to be the better option, especially for terms between one and two years.

 

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Disclaimer: Every possible effort has been made to keep the information in the rates tables as accurate as possible, however, neither the publishers of Mortgage Rates nor anyone engaged to compile these tables accept any liability for inaccuracies or any loss suffered as a result. It is strongly advised that readers check loan details directly with the provider concerned.

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