Floating and fixed mortgage interest rates eased significantly in the past month after the Reserve Bank cut its Official Cash Rate 25 basis points to 5.50%.
Real Estate Institute of New Zealand national president, Graeme Woodley says that most lending institutions reduced their one to three year fixed rates in the month ending May 10.
Thirteen of the 18 institutions surveyed by the institute dropped their fixed rates between 0.14% and 0.66%, with most fixed rates dropping by 0.25%.
Floating rates experienced a similar degree of easing, the vast majority of floating rates on offer falling by 0.20 to 0.26%.
"The majority of lenders dropped both their fixed and floating rates over the last 30 days, an encouraging sign for New Zealand home owners. In particular the average rate for floating mortgages has eased significantly."
Woodley says that compared to last month, where the easing of rates constituted ‘tweaking’ by most of the institutions, the rate changes across both banking and non-banking institutions were significant.
“Some rates lowered by as much as 0.86%, however generally the degree of movement was between 0.25 and 0.35%. This is much more significant than the 0.10 to 0.25% range in the month to April 10.”
“Prior to this month’s survey, movement in rates appeared to represent merely a realignment of rates between institutions. In the latest figures, we have begun to see a degree of movement that delivers tangible benefit to homeowners. For example, in the 30 days to April 10, two-year fixed rates ranged from 6.75 and 7.10%. The latest survey shows that range has eased by 0.25 to 0.30%, to now range between 6.50 and 6.80%.” To see a full list of rates go to Good Returns Mortgage Rates page here.
