OCR changes and what they mean to you

Home Loan borrowers got another boost from the banks last fortnight with the Reserve Bank announcing another reduction in the OCR from 3.25% to 3.00%. This should see the banks move pretty quickly with reductions in their floating lending rates, whilst the competitive nature of the Banks trying to write good lending business at LVR levels of 80% or better, is encouraging some longer term fixed rates under 5%.

Further LVR restrictions coming

The OCR announcement follows some challenging times for the Reserve Bank. We are still awaiting the introduction of further LVR speed limit restrictions on the Banks in attempts to cool the Auckland investment property market (effective 1.10.2015), and we appear to be experiencing substantial falls in business confidence, particularly in relation to the falling dairy commodity prices over the last few months. Global economic conditions indicate that it is quite likely that the Reserve Bank will be encouraged to reduce the OCR even further during the remainder of 2015. 

Options for deposits

There is still an opportunity for buyers with less than a 20% deposit, both with the banks, and with the Government administered scheme known as Welcome Home Loans, and the use of Kiwisaver contributions and the Homestart Grant. And of course there is always the ability to get support from family members in the form of a guarantee. 

It is important to seek professional advice when considering a property purchase and to carefully consider your interest rate choices to suit your own particular circumstances and goals in light of the current climate of volatility and change. 

The current rates of the key lenders are highlighted below. Note that some of these rates are only available to borrowers where their LVR is less than 80%.  Rates for borrowers requiring lending beyond 80% are generally higher. As always, the rates are subject to changes and other conditions.  

 

Mortgage Lender

Floating

6 mths

1 year

18mths

2 years

3 years

4 years

5 years

ANZ

6.49

5.59

4.89

5.55

4.99

5.59

5.75

5.79

ASB Bank

6.50

5.39

4.89

5.25

5.10

5.39

5.75

5.99

BNZ - GlobalPlus

6.49

5.59

5.19

n/a

4.99

5.20

5.40

5.59

Heartland

6.70

6.9

7.00

n/a

7.25

7.85

n/a

8.55

Kiwibank

6.40

5.39

4.89

n/a

4.99

5.39

5.75

5.99

SBS Bank

6.39

5.59

4.99

4.85

4.99

4.99

 

5.59

The Co-operative Bank

6.20

5.45

4.89

4.99

4.99

5.20

5.40

5.59

TSB Bank

6.49

5.60

5.45

5.59

4.99

5.40

5.85

5.85

Westpac

6.40

5.39

5.39

5.39

4.89

5.49

5.75

5.79

 

How a mortgage broker can help

The Rothbury team is available to offer you an obligation free opportunity to discuss your home lending needs. We are well positioned to be able to understand the lending terms and conditions of most of the lenders, and therefore tailor your requirements to ensure that you receive the best possible deal. 


Jon O’Connor

About the Author

Name: Jon O’Connor        

Jon is the General Manager of Rothbury Life & Morgages, a nationwide life insurance and mortgage advisory operation for Rothbury Insurance Brokers


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Jon is the General Manager of Rothbury Life & Morgages, a nationwide life insurance and mortgage advisory operation for Rothbury Insurance Brokers

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Disclaimer: The articles published on this blog are designed to provide general information and do not take into account any individual’s particular circumstances. We recommend that you obtain professional advice on your requirements before making any decision about a financial product.
 


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