[jess]

Sorry it's bad news for those who have not yet bought a home, but for budgeting purposes...

Banks have started responding to the Reserve Bank's move to lift the official cash rate, with three lifting their floating mortgage rates.
Reserve Bank governor Alan Bollard raised the Official Cash Rate by 0.25% to 7.5% on Thursday in an attempt to curb housing-led inflation. It was the first rise in the Official Cash Rate since December 2005.
The ANZ has increased its standard variable rate from 9.55% to 9.8% - effective from Friday for new customers...


Full Radio NZ story here (http://www.radionz.co.nz/news/latest/200703091521/three_banks_lift_floating_mortage_rate_after_reser ve_bank_rise).



(On a brighter note -- the higher OCR should be good for earnings on NZ savings accounts and such.)

[willowshouse]

Just thought it was worth pointing out that unlike in the UK, in NZ it seems the longer you fix your rate for the cheaper it becomes. ie a two year fixed rate will be a lesser percentage than a six month fixed rate - hence lots of people here fix their rates. Also, although the ASB rate has increased to 9.8% there are deals out there at around 8%. Still considerably more than UK I know but almost 2% makes a big difference when you're budgeting.

[Moorf]

Thankfully Woz had spotted something in the paper last week and re-fixed our mortgage ;)

[jess]

Just thought it was worth pointing out that unlike in the UK, in NZ it seems the longer you fix your rate for the cheaper it becomes. ie a two year fixed rate will be a lesser percentage than a six month fixed rate - hence lots of people here fix their rates. Also, although the ASB rate has increased to 9.8% there are deals out there at around 8%. Still considerably more than UK I know but almost 2% makes a big difference when you're budgeting.I didn't know it was different in the UK. I remember it being the same as NZ in the states so didn't think of that - good point. :nice1ASB rates for different types of home loans, for example, are online here (http://www.asbbank.co.nz/section459.asp). But as Willowshouse said, you can usually talk it down a little bit from there.

Moorf - good going! We have a little over a year and a half before we have to re-fix, so I hope for better news then!

[suebeenz]

I didn't know it was different in the UK. I remember it being the same as NZ in the states so didn't think of that - good point. :nice1ASB rates for different types of home loans, for example, are online here (http://www.asbbank.co.nz/section459.asp). But as Willowshouse said, you can usually talk it down a little bit from there.

Moorf - good going! We have a little over a year and a half before we have to re-fix, so I hope for better news then!

Apparently when there is an impending rate hike coming, the banks suddenly get really stingy and aren't willing to throw anymore bones your way. My broker noticed that was happening - I took her advice and locked in the day before. :clap

Anybody get a lifetime free credit card with their mortgage?

[incredible hulse]

Just thought it was worth pointing out that unlike in the UK, in NZ it seems the longer you fix your rate for the cheaper it becomes. ie a two year fixed rate will be a lesser percentage than a six month fixed rate - hence lots of people here fix their rates. Also, although the ASB rate has increased to 9.8% there are deals out there at around 8%. Still considerably more than UK I know but almost 2% makes a big difference when you're budgeting. I just took this that they were expecting (longterm) the rates to drop. I think the long term UK rates are higher than short term fixed because the interest rates have been lower than traditional (at least until the recent 2 rises)