Low Interest in Home Loan Tender a Good Thing

Media Release
21 February 2006

Low Interest in Home Loan Tender a Good Thing

- Interest rate increases make best home loan rate more important than ever for home buying/refinancing
- Interest in different means to negotiate home loans
- Fixed five year term most popular to date

New Zealanders’ focus on getting the lowest home loan rate they can has driven high levels of interest in BankDirect’s latest online home loan tender.

The tender, which runs for two weeks to February 27, allows people buying a home or refinancing their existing mortgage to pick the reduction they want off BankDirect’s carded home loan rates. Successful parties will then be able to draw down funds using their discount over the next few months.

Anna Curzon, Marketing Manager at BankDirect says that in the first week the number of tenders entered have already exceeded targets.

“We have seen real interest in the tender, which tells us two things: there definitely are people out there looking to buy or refinance; people recognise the importance of getting the most competitive rate available. For people coming off a fixed rate negotiating a 0.5% p.a. reduction on their new rate could be the difference between affording to keep pay TV or heading to the café on the weekends or not.

“Of course there are people trying some ambitious tenders, but that is all part of the negotiation process. BankDirect is able to offer some of the most competitive mortgage rates in the market and once again people are responding well to the innovative way we offer products and services to them.

“One interesting piece of anecdotal information is that in the first week of the tender two out of every five people have selected a fixed five year term as their preference. This supports the view that many people are looking to longer term home loan fixed interest rates to protect themselves from a jump in their repayments.”

ENDS

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