Fixed rates increase across the board

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Fixed interest rates have risen sharply across the board recently, the Real Estate Institute says.

Thursday, September 16th 1999, 12:00AM

by Paul McBeth

Fixed interest rates have risen sharply across the board and the majority of floating mortgage rates remained stable although minor upward movements were made by three lending institutions, according to the latest survey conducted by the Real Estate Institute of New Zealand.

Fixed rates rose in the latest period by between 0.25 and 1.0 per cent.

One year fixed rates now range between 6.20 and 6.95 per cent, five year fixed rates range between 8.60 and 8.85 per cent, with two, three and four year fixed rates between 7.10 and 8.95 per cent.

National President of the Real Estate Institute, Max Oliver says the figures herald the end of consumer-friendly interest rates.

"While we have seen fixed rates firming for the last three months and anticipated this would continue for the rest of the year, the latest period is remarkable for the pronounced degree of change. In particular, three year fixed interest rates have risen as much as 1.0 per cent."

"Most banks did not expect the Reserve Bank to raise the Official Cash Rate until midway through next year, so it is evident that the Reserve Bank’s recent Monetary Policy Statement predicting the Official Cash Rate increasing by as much as 1.5 per cent in November has caused lending institutions to accelerate their long term strategies for interest rates," Oliver says.

Paul is a staff writer for Good Returns based in Wellington.

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