Mortgage calculators work hard following OCR cut

Mortgage calculators work hard following OCR cut

“With key retail banks now passing on some, if not all, of the Reserve Bank’s record low cut to the Official Cash Rate it’s proving an unexpected but timely boost for many Kiwis,” says Geoff Barnett, National Manager of Century 21 New Zealand.

“To see some key retail banks even make partial cuts is welcome news because earlier in the week few were expecting anything. This is great for the likes of first homebuyers, it will help boost confidence in our dairy-dominated regions, and may even entice the likes of some retirees to trade in their low-yielding term deposits for an investment property commanding a good rental and promise of capital gain.

“These days with tighter lending rules, it’s not just about getting a deposit together, banks are really scrutinising people’s ability to service mortgage debt long-term. House prices keep going up in many parts of New Zealand, but falling interest rates help mitigate that and this may just get the likes of young couples and singles over the ‘mortgage approval’ line.”

Mr Barnett says banks’ website mortgage calculators will be working hard with this news.

“People will be tapping in the new rates their bank might be offering and saying… maybe we can do this now. With rents soaring for many while at the same time some fixed rates now sit below 4.5%, it may be a good time to do your sums particularly when you factor in some cooling off in parts of the market in recent months.

“Six months ago many might have thought we can’t do it. Well six months on many sales times have lengthened, many prices have softened, and now interest rates get an unexpected cut. Hopefully these factors will help open the door to home ownership for more people,” says Mr Barnett.

www.century21.co.nz

ENDS

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