Current Interest Rates

Rates current at  29 January 2015

Floating 6.70
Fixed 6 months 5.80
Fixed 1 year 5.59
Fixed 2 years 5.59
Fixed 3 years 5.59
Fixed 4 years 5.99
Fixed 5 years 6.25
Revolving Credit 6.70

For more information regarding interest rates or current specials phone 0800-800-590 (7 days) or email info@mortgagecare.co.nz

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Please note that the above is a guide only. Phone 0800-800-590 (7 days) or click here to contact your friendly and experienced Mortgage Care Team for free mortgage advice.

Interest Rate Outlook – December 2014

No Surprises
The last couple of months have seen no surprises in the property market.  The expected post-election rebound occurred coupled with seasonal increases in activity.

There have been cuts to fixed mortgage rates especially in the medium to longer terms giving increased certainty for borrowers.  In addition the Reserve Bank left the official cash rate at 3.5% on 11 December.  These factors, together with the decrease in petrol prices provide a favourable short term outlook for the consumer.

Whilst Auckland and Christchurch dominate in relation to percentage increases, it is good to see other provincial centres increase in value, reversing a previous trend.  In the year to October New Plymouth was up 3.5%, Nelson up 2.5% and Queenstown up 7.8%.

The Year Ahead
Reserve Bank governor Graeme Wheeler said that New Zealand’s growth was expected to
remain at or above trend through 2016, with unemployment rates dropping.  The outlook for the New Zealand economy appears to remain solid, supported by strong migration inflows.  Some predict that the OCR will remain unchanged over the next 12 months meaning floating mortgage interest rates look unattractive.

House Prices and Rental Yields
The increase in house prices have outpaced incomes and rents over recent years.  Back in the early 1990s, the median sales price of an existing home was equivalent to around 14 years of rental payments.  It is now around 24 years of rental payments.  Although rental yields have been declining since the early 1990’s, this has coincided with a shift to lower mortgage interest rates.

Westpac recently released its Property Investor Report showing the best suburbs across the country for capital gain and gross yield.  Whilst Auckland dominated the residential property investor market for capital gain, it did not feature anywhere in the top 10 suburbs nationally for gross yields.  However based on a combination of capital gain and gross yield, Auckland suburbs make up all of the top ten, led by Otara with a gross yield of 5.9% and a capital gain of 15.9%.

The top three suburbs for three bedroom houses by gross yield were Forbury (Dunedin) at 8.3%, South Dunedin at 8.2% and Cannons Creek in Porirua at 7.8%.  Dunedin registered seven times in the top 10 suburbs by gross yield.  Dunedin has the benefit of large student numbers requiring rental accommodation.

Auckland remains the undisputed winner when it comes to capital gains, where three bedroomed homes increased in value between 14 and nearly 19 percent.
(Interest Rate Outlook sourced from NZFSG Adviser Services, 17 December 2014)