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BNZ tickles interest in fixed rates

Highlighting the intense competition building up in the mortgage market, BNZ has slashed its 18-month fixed “Classic” mortgage rate to 5.10% “for a limited time.”

Sunday, May 13th 2012, 11:08PM

by Jenny Ruth

The rate was previously 5.89% - BNZ also offers an 18 months fixed "GlobalPlus" rate of 6.10% - and compares with the bank's range of floating rates between 5.74% and 6.40%.

BNZ retail director Andy Symons says it's still "a great time" to be on floating rates but "observations show that some home buyers are interested in a short-term fixed loan" and the new rate is one of the lowest in the market.

Kiwibank led the current round of rate cuts, slashing its one-year rate on April 26 to just 4.99% for those with at least 30% equity compared with its standard 5.65% one-year rate.

"BNZ continues to be one of the country's most competitive home loan banks with some of the best products and rates on offer," Symons says.

He claims BNZ has "saved Kiwis more than $110 million in interest over the past five years with our award-winning Total Money product which gives customers the ability to offset their home loan against savings."

The rate cuts are against a backdrop of falls in longer-term wholesale interest rates. The one-year swap rate, from which one-year fixed mortgages are priced, has dropped from 2.84% four weeks ago to 2.51% last week and the three-year swap rate has fallen from 3.25% to 2.77% over that period.

Comments from our readers

On 14 May 2012 at 10:32 am alttab said:
I think BNZ should also look at cutting its Total Money floating interest rate, it's not as competitive as it once was.
On 14 May 2012 at 5:45 pm jeanzcrafton said:
The Refi Plus program will waive the normal credit score requirement for a refinance; it will have reduced documentation standards for proof of income; and it will allow for computer-based appraisals, which tend to inflate the value of a home and make it easier to qualify for a refinance. Search online for 123 Refinance they are the best and fast.
On 20 May 2012 at 9:05 pm Ajinesh said:
Its nail biting time,should we wait for further drop to fix rates??? when will floating rates shift down?
Commenting is closed
  
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The new Reserve Bank governor, Graeme Wheeler, predicts that the official cash rate won't by going anywhere until 2014.

This is clear from the 90-day bank bill forecast graph in the December Monetary Policy Statement. It shows clearly how over the past year forecast increases kept getting pushed down each quarter.

A year ago the bank was predicting the 90-day bill rate would be up at 4.00% by March 2014. That forecast was wound back to 3.3% in March, 3.2% three months later and is now down at 2.8%.

The good news for borrowers is that, asssuming things pan out as forecast, then home loan rates aren't likely to be going up any time soon either.

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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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