The majority of lending institutions announced an increase in their one year fixed interest rates in the month to January 10 and significant upward movement was recorded for two and three year fixed interest rates, according to the latest survey conducted by the Real Estate Institute of New Zealand.
A third of institutions increased their floating rates, which now range between 6.50 and 7.25 per cent, compared to the 5.85 to 7.25 per cent available in the month to December 10, 1999.
One year fixed rates now range between 6.85 and 8.00 per cent, with most institutions recording an increase of between 0.25 and 0.30 per cent from last month. Five year fixed rates now range between 8.70 and 9.10 per cent, while fixed two, three and four year mortgage rates now range between 7.75 and 8.95 per cent.
"As predicted by economists, lending institutions and the Institute, interest rates have continued to move steadily upwards. ," says Mr Max Oliver, National President of the Real Estate Institute.
"The recent interest rate increases are strongly related to the Official Cash Rate, which is scheduled for review later this month. Having already risen from 3.0 to 5.0 in the last Reserve Bank review, if the OCR continues to rise to the anticipated 7.0 per cent by the end of 2000, mortgage rate increases are likely to continue for some time yet."
