1/23/2024 0 Comments Evil sudoku puzzles printable![]() ![]() This margin fell to 1 percentage point in early July, before rising to 1.20 and eventually 1.38 percentage points by early September. The difference between the average weekly two-year swap rate and two-year mortgage rate has oscillated since just before the RBNZ stopped hiking the OCR in late-May (according to maths done by the Herald, using data published by .nz).įor example, there was a 1.46 percentage point difference between the two rates in mid-May – the average two-year mortgage rate was 6.52 per cent and the average two-year swap rate was 5.06 per cent. Massey University School of Economics and Finance professor David Tripe said one could look at the difference between swap rates and mortgage rates to get a sense of whether banks are creaming it. He said all it takes is one big bank – recently it’s been ASB – to hike rates, for the others to follow. ![]() The chief executive of Squirrel mortgage broking firm, David Cunningham, believed they were. Now for the question of whether banks are hiking their mortgage rates more than they need to. ![]() “Unless there is further resurgence higher in global rates, or isolated shocks to the New Zealand economy, we consider that mortgage rates in New Zealand may have reached their peak.” Litt believed: “The drag higher in offshore rates, and impact on local mortgage rates, may have done its dash for now. Meanwhile, the US Treasury is having to issue debt to meet its obligations as the pile of government bonds the Federal Reserve bought as a part of its Covid-era “money printing” programme mature.Īgain, these factors are indirectly putting upward pressure on mortgage rates in New Zealand. Indeed, Litt noted the yield on the US 10-year Government Bond had risen by about 50 basis points over the past three months.Īdding to the supply of US Government Bonds in the market, he noted Japanese and Chinese authorities were believed to be selling these bonds for foreign exchange reasons. Accordingly, (much like the New Zealand Government) it may have to pay investors higher rates of interest to ensure they buy all this debt. ![]()
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