Caution urged on mortgage rate drop
Top economists are warning potential home buyers to proceed with caution as another bank drops its variable mortgage rate to the lowest in 40 years.
BNZ announced yesterday a 0.26 drop in its TotalMoney variable housing rate, making it the lowest variable home loan rate available in the market at 5.59 per cent. This comes one week after rival ASB Bank dropped its floating rate to 5.75 per cent and just days after Westpac dropped its floating rate to 5.69 per cent.
But before potential home buyers rush out to purchase a new home, economists are warning the low rates won't last.
Massey University banking studies lecturer Clair Matthews says borrowers need to consider if they can afford their mortgage at a higher rate before they take advantage of what is on offer now.
"I wouldn't want people to go out and borrow money that they wouldn't have borrowed otherwise," she says.
"The variable rate is at a record low and we have to expect that it will go back up."
To read the full NZ Herald article click here
Posted: 18 Sep 2009
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