News & Research

Retail banks competing strongly for the best borrowers

03 May 2018

Mortgage interest rates have stayed flat and low in recent weeks, with the retail banks competing strongly for the best borrowers.

Alongside NZ’s migration balance with Australia and investors’ listings behaviour, interest rates are one of three key factors we will be watching closely for the rest of 2018 and into 2019. This is because almost 90% of NZ’s fixed-rate mortgages (which are about 80% of all mortgages) roll over within a two-year horizon.

On that front, the latest CPI inflation data was subdued (1.1% annual) and came as no surprise to the markets. The prospect of no change in the OCR until at least next year remains likely, although we will get further insight on this at the next Reserve Bank Monetary Policy Statement (and rates review) on 10th May.

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