Property Investment
Property Investment
2 min read
Mortgage rates have stopped rising … but for how long?
See how interest rates are shifting, the lowest rates available, and how much you could negotiate right now.
Property Investment
2 min read
Here is your monthly plan-English interest rate update.
Westpac just announced they are cutting their mortgage interest rates. This is based on last month’s surprise OCR hold.
The market reacted, with the 1-year wholesale interest rate falling 0.36% in just 2 weeks.
Think of the wholesale rate as what it costs banks to borrow money and lend it to you and me for our mortgages.
That's a big drop.
But is that the start of a new round of interest rate drops?
Probably not. The wholesale rates dropped back to where they were around August. So it’s unlikely that rates will start falling (across the whole market) anytime soon.
I read this more as Westpac increased their interest rates above what other banks had done, and now they're coming back into line with the market.
If we zoom out and look at all of the banks, after several months of movement, mortgage rates barely changed this month.
The average 1-year rate my mortgage advisers are negotiating at Opes Mortgages is up just 0.01%. That’s compared to last month.
And the 2-year rate they’re getting is down 0.03%.
There’s not much movement at all, across the board.
The lowest 1-year rate that my mortgage advisers are negotiating is still 4.79%.
The lowest 2-year rate has fallen slightly, from 5.25% to 5.19%.
And most other rates haven't moved at all.
However, there's a surprisingly big difference between what banks are charging right now.
Remember, a bank might advertise one rate online. But when you go to lock in that rate, they may offer you a discounted one.
And there's more variation between banks on the negotiated rates than I've seen in a long time.
Some banks are offering 4.79% for the 1-year rate. Others are offering 5.09%. A 0.3% difference.
Shopping around between banks can be worth $1,500 a year on a $500k mortgage.
There's still a lot of uncertainty about where mortgage rates are heading.
And we're still waiting for the Reserve Bank's next OCR announcement in December.
While we wait to see what happens with interest rates, it's worth checking whether you're getting a competitive deal right now.
Not sure what to do with your mortgage, or got a scenario you want to run past me?
Hit reply and let me know.
I'll come straight back to you.
Cheers,
Pete
Mortgage broker for over 10 years, property investor and Managing Director at Opes Mortgages
Peter Norris, a certified mortgage adviser with 10+ years of experience, serves as the Managing Director at Opes Mortgages. Having facilitated over $1.2 billion in lending for 2000+ clients, Peter is a respected authority in property financing. He's a frequent writer for Informed Investor Magazine and Property Investor Magazine, while also being recognized as BNZ Mortgage Adviser of the Year in 2018 and listed among NZ Adviser's top advisers in 2022, showcasing his expertise.
This article is for your general information. It’s not financial advice. See here for details about our Financial Advice Provider Disclosure. So Opes isn’t telling you what to do with your own money.
We’ve made every effort to make sure the information is accurate. But we occasionally get the odd fact wrong. Make sure you do your own research or talk to a financial adviser before making any investment decisions.
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