OCR Kept On Hold

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.

In a further direct reference to Auckland’s current housing market he said..“In the meantime high house price inflation persists, especially in Auckland. As has been noted for some time, the Reserve Bank does not want continued high house price inflation to compromise financial or price stability. Recently introduced restrictions on high loan-to-value mortgage lending are expected to help slow house price inflation and the Bank will continue to monitor the situation closely.”

And…“Although we expect to keep the OCR unchanged in 2013, OCR increases will likely be required next year.” A nod to increasing floating interest rates..

Go Sonny Bill and The Kiwis!!  🙂

httpwww.rbnz.govt.nzstatisticskey_graphsmortgage_rates

Penalties for Over 80% Lending Begin Taking Shape

Well, there has been a flurry of emailed updates from the major lenders over the past 6 weeks..

Fee’s, interest rates, and credit policies have all been getting tweaked. (not twerked)

Among the changes are new Low Equity Premium fee’s, separate sets of interest rates for over 80% lending, and fee discounts that might once have been available are all but gone for the over 80% borrower.

These additional costs are adding up.

As an example, ANZ is applying a 0.5% margin on interest rates over 80%. On borrowing of $550,000 that’s an additional $2,750 p.a.

Borrow between 85% and 90% with Westpac and the Low Equity Margin is 1.15%. On borrowing of $550,000 that’s an additional $6,325 p.a.

With these sort of costs one would imagine requests to Banco De Mum n Dado will be on the increase…