Message in a bottle

The trend and the message in the changes to home loan rates in the past week have been clear and a little worrisome for borrowers.

As reported rates for terms of 18 months or more have risen, and the rises for three and four-year money have been steep. In many cases more than 50 basis points.

Shorter dated money rates have generally stayed static, however market leader Kiwibank and one of the building societies have cut their floating rates in the past week. (BNZ also made a cut to one of its loan products, Total Money, however Total Money is part of a product which includes some other elements. For this reason I don’t include it as a “standard” rate).

To see how the interest rate curve has steepened check out this graph showing Kiwibank’s new rates versus its earlier ones.