Mortgages
2 min read
Here is your monthly interest rate report.
This gives you a quick, plain English update on interest rates.
Mortgage interest rates dropped a lot in October. But they didn’t change much in November.
Only the 6-month rate got a big cut. The average bank currently offers 5.99% for 6 months after you negotiate.
That’s down 0.4% compared to last month.
The only other decent drop was for the 2-year rate. That’s down 0.12% compared to October.
Don’t get me wrong. These are still big drops. But rates aren’t falling as fast as they did in the prior month
Interestingly, the average bank increased its 4-year and 5-year rate in November.
This cements my view that the longer-term rates won’t drop much over the next year. I reckon that only the shorter-term rates will see any real cuts.
Remember, the bank will usually discount their rate when you take out a mortgage.
So they might advertise 5.59% for the 2-year rate.
But, when you borrow the money, they might offer you 5.49%.
It’s hard to see these as a borrower. So I like to share the discounts we’re seeing at Opes Mortgages.
Banks were discounting some rates over 0.4% a few months ago. Huge!
Today, apart from the 6-month rate, most rates are discounted by only 0.05%.
Rather than secretly discounting, banks are making those lower rates public.
So don’t feel bad about the smaller discounts. You’re still getting the benefit of the lower rate.
The lowest 1-year rate is the same as last month. It’s still at 5.59%.
This rate is still substantially lower (0.5%) than just 2 months ago.
The only exception (again) is the 6-month rate. The lowest negotiated rate in the market fell 0.3% in November. It’s gone from 6.29% to 5.99%
My usual disclaimer – these are the lowest rates negotiated across all banks. So, these DO NOT all come from the same bank.
For example, only 2 banks will currently take the 1-year rate down to 5.59%.
So don’t look at this table and think: “These are the exact interest rates I’ll be offered.”
These rates are an absolute best-case scenario.
A net 17% of mortgage brokers say the banks are more willing to lend than the previous month.
This reading has fallen over the last few months.
Sure, more mortgage brokers say it’s getting easier to borrow. But a few more say it’s getting a little tougher. At least compared to last month.
One of the reasons for this is that banks are busy.
Lots of people are looking for lending. So the teams in the bank are doing it tough in the lead-up to Christmas.
In a tough market, some mortgage brokers will submit borderline mortgage applications. This clogs up the queue for everyone.
That’s why the median bank takes 9 days to turn around a mortgage application through a broker.
Mortgage broker for over 10 years, property investor and Managing Director at Opes Mortgages
Peter Norris, a certified mortgage adviser with 10+ years of experience, serves as the Managing Director at Opes Mortgages. Having facilitated over $1.2 billion in lending for 2000+ clients, Peter is a respected authority in property financing. He's a frequent writer for Informed Investor Magazine and Property Investor Magazine, while also being recognized as BNZ Mortgage Adviser of the Year in 2018 and listed among NZ Adviser's top advisers in 2022, showcasing his expertise.
