Sharechat Logo

Kiwibank lowers floating rate

www.MortgageRates.co.nz

Monday 8th February 2010

Text too small?

Kiwibank is the first bank to change its floating mortgage rate this year, cutting it by 14 basis points to 5.65% which is the second lowest floating rate behind BNZ's TotalMoney product offering the lowest rate of 5.59%.

Kiwibank communications manager Bruce Thompson says Kiwibank made the change to its floating rate because it wanted to make sure it retained a competitive position.

He says a lot of people are uncertain about what's happening with interest rates so they are going on the floating rate to watch and wait.

"People are doing a mixture of variable and fixed rates and we want to make sure when they look at what's available they see they get a good rate with us."

He says most people are looking to fix because it is perceived that rates will go up in the middle of the year, however there is still strong demand for the floating rate with 40% of drawdowns on the floating rate.

BNZ economist Tony Alexander says we are seeing a change in the floating rate now because of weak data and unemployment numbers which suggest the official cash rate won't rise until June. Previously many economists were expecting a rise in March or April.

He says if any other banks make movements he expects them to be minor because there has not been much of a change in 90 day bank bill yields and it is more expectations of them changing rather than the immediate cost of borrowing changing.

Alexander believes the option of floating looks best for most people and as we approach the time when floating rates start rising - mid-year - for a while the optimal thing may be to fix one year as many are still choosing to do at the moment.

His advice for borrowers is to budget for about a 3% rise in floating rate borrowing costs between the middle of this year and the end of 2011.

Check and compare all home loan rates at www.mortgagerates.co.nz

 

 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report