OCR Announcement - Canstar Comments

Please attribute quotes to Canstar general manager Jose George

"The RBNZ decision to hold OCR is in line with Canstar expectations. Canstar expects home loans rates to continue to rise in 2017 as banks and other lenders aim to pass on the pressures of overseas funding costs, while looking to retain margin.

“For existing home loan customers Canstar recommends that they review their budgets and stress test their repayment capability through online calculators to ensure that they can accommodate any potential increased cost of servicing their loans.

“For people looking to get on to the property market either as first home buyers or as investors, while the early signs of a slowdown in the market is encouraging, this could be offset by an increased burden of repayments in a costlier home loan environment.

“For savers the future is still unclear. There have been small, sporadic increases to savings rates in recent months but in general, these increases have not been sustained. A recent Canstar review found that term deposit rates, on average, have largely remained unchanged from 12 months ago even in the face of a 75bps drop in OCR over this time. Savers should shop around to get the best available rates or even consider splitting their investment across a number of options to gain maximum benefit. Promotional and special rates will be made available by banks from time to time and the easiest way to keep track of these will be through the use of comparison sites like canstar.co.nz”

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