Interest rate

Can’t wait for Twyford to decry this good news

Mortgage interest rates are now the lowest they have been for 60 years.

No doubt Phil Twyford will tell us this is awful and Labour will be moving to raise those interest rates.

Mortgage rates have hit a 60-year low as banks vie to undercut each other.

BNZ today shaved 30 basis points off its two-year fixed rate, down to 4.69 per cent.

Statistics New Zealand data shows commercial banks’ mortgage rates have not been so low since 1955.

BNZ’s move follows the Reserve Bank’s cut to the official cash rate by 25 basis points to 3 per cent last Thursday.

BNZ’s new rate undercuts SBS Bank’s 4.85 per cent 18 month rate.

Interest.co.nz said the rate was available to BNZ customers who had at least 20 per cent equity in their property and who had a BNZ account receiving salary or wages.

Massey University banking expert David Tripe said BNZ’s new rate was “probably somewhere near where rates ought to be”. ?? Read more »

Twyford ignores Labour’s own history with interest rates

Phil Twyford is trying to blame interest rates for the so-called housing crisis.

The average Kiwi household is $250 a year worse off because the Auckland housing boom has kept interest rates high, Labour has claimed.

With the Reserve Bank due to revise its 3.5 per cent official cash rate (OCR) on Thursday, Labour housing spokesman Phil Twyford has issued figures showing an across the board 0.5 cut would provide an immediate $725 million boost.

He says the analysis ? which he admits is an assumption, given all interest rates would not immediately respond in a uniform way ? reinforces his criticism of National?s ?abject failure? to control soaring prices or build enough affordable housing.

?This is money that is currently going to offshore lenders. The whole country ? households, consumers and businesses ? are paying the price of the Government?s failure to fix the Auckland housing crisis,? Twyford said.

Which kind of ignores Labour’s recent history on interest rates.

David Farrar takes a break from arts reviews to point out the hypocrisy of Twyford’s statements.

Let?s have a look at the history of the OCR:

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Yeah that 3.5% is just killing businesses and households. Labour never had it below 4.5% and even had it above 8% until they crashed the economy into recession (before the GFC struck).

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So, Labour launches a policy to solve Kiwis money fears…only problem is Kiwis don’t have that problem

Labour launched their much vaunted new “Big Tool” to solve some problems they say are worrying Kiwis. Like rising interests, that are still miles off where interest rates were the last time they were in government…and protecting borrowers from money issues.

The only problem is for Labour is that the problem doesn’t actually exist in voters minds.

Kiwi’s money worries are at the lowest level in two years and are expected to continue improving this year, according to a report by a credit agency.

Dun & Bradstreet’s Consumer Financial Stress Index hit -5.6 points in March down from 7.5 points the same time last year.

Anything below zero shows lower financial stress.

stress Read more »

Labour’s ‘big tool’ policy turns out to be a big dog

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Aside from a half hearted attempt from the Labour Party spokesman for Fairfax, Vernon Small, and Brian Fallow who has taken time off looking around the globe for catastrophic global warming and a carbon trading system that works it’s not been a particularly welcomed policy release. The exporters love it though with a free lunch on the backs of the working poor.

We wait for the endorsement and backing of Labour from the Property Council, first of all Labour are going to drop their tax rate from 28% to 15% by introducing a CGT and now they are going to give them the gift of lower interest rates which is generally the biggest cost by taking money out of the lowest paid who will now be earning more in retirement than when they are working.

 

Labour’s proposals to allow the Reserve Bank to adjust KiwiSaver contributions rather than interest rates to control inflation could hurt savers and see debt repayment delayed until retirement, KiwiSaver experts warn.

The Labour Party this morning announce proposals to change New Zealand’s monetary policy tools by introducing a variable savings rate for KiwiSaver.

The policy would require the Reserve Bank to use changes to the rate of people’s KiwiSaver contributions rather than interest rates to control inflation while taking pressure off the over-valued kiwi dollar.

Labour would also make KiwiSaver compulsory and increase contributions from the current 6 per cent combined employee and employer contribution to 9 per cent over time.

According to sorted.org.nz ?if you earn?$600pw and you save at Labour’s compulsory rate you will enjoy a retirement income of $496pw and when added to the super payment of $366 you will be earning $262 a week more in retirement than when you were working and struggling to get ahead. ? Read more »

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