Interest rates set to rise

The cost of paying your mortgage is set to rise this year as interest rates head up.

Rising interest rates
  • 31 January, 2017
  • RESIDENTIAL
  • Interest rates, OCR, Official cash rate, Mortgage rates

Fixing a $300,000 mortgage for two years will cost you more this year than it did last year.

Figures supplied by rate-tracking firm Canstar show the average interest rate for a two-year fixed term has increased from 4.74 to 4.87 per cent.

It's only a 13 basis points jump, but on a $300,000 mortgage over a 30-year term paid monthly it will now cost $288 more a year to service.

And the difference is even greater for longer fixed terms, which have risen at a faster rate than shorter terms.

Fixing a $300,000 mortgage for three years is now $420 a year more and fixing for five years will cost $816 a year more to service compared to fixing for five years in February last year.

The average interest rate for three-year fixed terms has increased by 19 basis points to 5.17 per cent and the average rate for five years has increased by 36 basis points to 5.71 per cent.

Canstar figures show no change in the average rate for one-year terms.

Longer-term rates have been rising in the past six months and in recent weeks there has been a flurry of increases by the banks.

The next OCR announcement is 9th February 2017 with the current rate being 1.75 per cent set in November 2016.

 

LJ Hooker NZ

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