Home loan rates have been slashed again - with TSB offering a one-year home loan rate of 2.49 per cent for borrowers with a loan to value ratio (LVR) of 80% or less.
The stunning low rate is believed to be a market record and puts it marginally lower than all the other major banks.
Home loan rates dropped to all-time lows this year after the official cash rate was slashed to 0.25 per cent in May. The Reserve Bank (RBNZ) has signalled this rate will be kept low until at least May 2021.
What next for mortgage rates?
Meanwhile, economists at ANZ, the country's biggest bank, are now picking the RBNZ will cut interest rates again by April 2021, as NZ is still in the early stages of the economic damage from the Covid-19 epidemic. As a third of NZ’s population are back in lockdown with a second outbreak, many employers are struggling to adjust to a different new world. Unfortunately, two other factors are only starting to make themselves felt:
Missing international tourists and students, and
The grim global economic outlook.
ASB’s economists agree with ANZ’s predictions, which all adds up to be good news for anyone with a mortgage or first home buyers or property investors seeking new lending.
Meanwhile, a study has revealed many NZ households are struggling to pay off mortgages
In other news, a study has revealed that thousands of households have missed their mortgage payments in August.
An analysis by a financial services comparison website was based on figures from the RBNZ, and showed that there were 10,905 mortgages in arrears as of 7 August, with the total number of missed payments exceeding 240,000 since April. That’s a staggering number of borrowers entering into arrears (overdue payments) on a weekly basis. Since the August numbers are not covered by the RBNZ’s home loan deferral scheme (aka “mortgage holiday”), analysts say the actual figure of households missing payments might be even higher.
As predicted, the RBNZ announced on Monday that it was extending the mortgage holiday scheme until March next year in response to the nation’s mounting mortgage debt.
The scheme has received around 84,000 home loan deferral requests since it was launched at the end of March, accounting for 13% of all mortgages nationwide.