Home loan interest rates forecast

Mortgage rate forecast

The Reserve Bank of New Zealand has held the Official Cash Rate as expected at 2.5%, but has increased its forecast track for interest rates by around 50 basis points as it sees inflation pressures building from the Canterbury recovery and the Auckland house price surge.

It now sees short term interest rates rising around 200 basis points to 4.7% through the two years from mid 2014.

This would imply floating mortgage rates rise to around 7.5% by early 2016 and suggests interest rates would rise around 100 basis points by the end of 2014 as next election approaches.

The central bank warned again that house price and construction cost inflation could spill over into wider inflation pressures and it was likely to increase the OCR next year. Its forecasts for the 90 day bill rate suggest it has bought forward its first expected rate hike from the September quarter of 2014 to the June quarter.

This remains less hawkish than market expectations for the first hike being in the March quarter of 2014 and for rate hikes over the next 3 years of 200 to 300 basis points.

However, markets viewed the statement as slightly more 'hawkish' on interest rates and pushed the New Zealand dollar up by more than half a cent to near a one-month high of 81.4 USc. The two year wholesale swap rate rose 2 basis points to 3.52%.

The bank also estimated that the limits on high Loan to Value Ratio (LVR) lending it is imposing from October 1 were 'worth' around 30 basis points of interest rate increases. This implies the Reserve Bank would have increased its forecast track by around 80 basis points with a peak closer to 5% by early 2016 than the 4.7% currently forecast.

What the Reserve Bank said today compared with last time

Here is a section- by- section parsing of the Reserve Bank's statement today in comparison with its last statement on July 25 to see how its view has changed. The July 25 comments are indented.

September 12 - The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent. Reserve Bank Governor Graeme Wheeler said: “The global outlook remains mixed. GDP growth in Australia and China has slowed and some emerging market currencies have come under considerable downward pressure. At the same time, the major developed economies continue to recover and New Zealand’s export commodity prices remain very high.

“Although long-term interest rates have risen globally in recent months, largely due to uncertainty around the timing of the Federal Reserve’s exit from quantitative easing, global financial conditions overall continue to be very accommodating.

Get a home equity loan now

2004-02-19 20:21:57 by shoptillyoudrop

While the rates are still low.
If nothing else, have it gutted by other folks. Cheap labor to gut it. But a pro GC to supervise. It will be at least 20 tons of plaster. Takes about a week, maybe two. Then they will point out all the important things that are wrong that you damn well better do something about. Plus you can add shear wall cheaply for much added structural strength (earthquakes, etc., insurance discount), which can't be done otherwise. All the wiring will be exposed and a snap to replace. Any hot Knob & Tube junctions that are itching to start a fire will be visible

Seeking advice: Time to refinance? (FHA Loan)

2008-04-12 09:43:18 by sarbuze

Brief background:
First time home purchase (April 2007) through FHA Loan at 5.75% interest. Our mortgage payment with PMI, insurance, taxes, etc is around $2000.
Financially we are quite stable and are currently doing some upgrades to the home (new kitchen, new landscaping in back yard).
Is now a good time to refinance since mortgage rates are dropping? Should we wait until they go down more, or until our renovations are complete?
Any advice is very appreciated. We're going to contact our financial adviser next week about this, but figured I'd get advice from some of the resident experts.

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Interest Rates Forecast For 2014 Available At LoanLove.com  — PR Web
With easy to understand language Loan Love explains some of the more detailed and in depth aspects of finding and securing the right home loan and has quickly become a trusted destination for current news and expert loan advice. ..

interest rates tipped to jump  — Stuff.co.nz
But the good news is that the economy is expected to boom in the next year or so, with a strong job market, rising wages and unemployment heading down to less than 5 per cent by early 2016, according to Reserve Bank forecasts. Rising interest ..

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    Mar 05, 2007 by First time buyer | Posted in Renting & Real Estate

    I know both will bring down my mortgage rate and both can be called points. I wanted to know what are the advantages and disadvantages of each. I asked this same question to our lender and either they refuse to answer the question or they don t know the difference. I feel like they are not being honest with me about this matter.

    • A little help for you I am a mortgage broker and to explain the difference is that there is no difference its just another way to charge you a point by not saying they are charging you a point they are both 1% of the loan amount