You're on your own here.
It has been 2 days since the Reserve Bank cut the official cash rate, and by how much do you think the big banks have cut their fixed rates?
No, not a jot.
Not, not a single basis point.
Absolutely nothing has come off their fixed rates.
It's not particularly helpful from the banks cause, you know, we're trying to get the country out of recession and the point of cutting the OCR is that the mortgage rates come down and then when you refix, you've got more disposable cash and the more cash you have, the more you're gonna spend and the faster we're gonna get out of this recession.
So thumbs up and thanks very much to the big banks for not helping.
Obviously, it's smart business for them.
They need to make as much money as they can.
The prediction is they will eventually cut the OCR cut their mortgage rates, but it'll be next year.
It won't be this side of Christmas, and no one's going to be able to force them.
There is, everybody has fired all their bullets at this stage.
The Reserve Bank's cut as much out of the OCR as it can.
The critics have written their columns, have given their interviews.
Nothing's happened.
The government's accepted all the recommendations of the select Committee inquiry, and I think we all know that that's a damp squib.
And to be honest, when it comes to the government, for them to do anything meaningful to the banks, it would have to be.
Something as massive as breaking up ANZ and ASB and the horror that that would send through the investment community would potentially be worse than us paying too much in mortgage interest rates at the moment.
So, The only conclusion you're gonna reach is that you're on your own.
No one is coming to save you from the banks.
No one's gonna force them to pass on the OCR cuts if they don't want to.
You're gonna have to hustle.
So when you refix, demand a better rate.
Look at what the advertised rate is and then tell them to shave 50 basis points off and if they don't cross the road to another bank that will.
That is competition.
You're on your own.
Heather du Plessis-Allan is a journalist and commentator who hosts Newstalk ZB's Drive show.
Not, not a single basis point.
Absolutely nothing has come off their fixed rates.
It's not particularly helpful from the banks cause, you know, we're trying to get the country out of recession and the point of cutting the OCR is that the mortgage rates come down and then when you refix, you've got more disposable cash and the more cash you have, the more you're gonna spend and the faster we're gonna get out of this recession.
So thumbs up and thanks very much to the big banks for not helping.
Obviously, it's smart business for them.
They need to make as much money as they can.
The prediction is they will eventually cut the OCR cut their mortgage rates, but it'll be next year.
It won't be this side of Christmas, and no one's going to be able to force them.
There is, everybody has fired all their bullets at this stage.
The Reserve Bank's cut as much out of the OCR as it can.
The critics have written their columns, have given their interviews.
Nothing's happened.
The government's accepted all the recommendations of the select Committee inquiry, and I think we all know that that's a damp squib.
And to be honest, when it comes to the government, for them to do anything meaningful to the banks, it would have to be.
Something as massive as breaking up ANZ and ASB and the horror that that would send through the investment community would potentially be worse than us paying too much in mortgage interest rates at the moment.
So, The only conclusion you're gonna reach is that you're on your own.
No one is coming to save you from the banks.
No one's gonna force them to pass on the OCR cuts if they don't want to.
You're gonna have to hustle.
So when you refix, demand a better rate.
Look at what the advertised rate is and then tell them to shave 50 basis points off and if they don't cross the road to another bank that will.
That is competition.
You're on your own.
Heather du Plessis-Allan is a journalist and commentator who hosts Newstalk ZB's Drive show.
3 comments:
The same banks hold the monopoly in Australia- the power or competition imbalance is the same yet the banks cut rates in alignment with the ocr resets.
What’s different is a law against collusion that comes with massive fines.
Plus a tendency for aussies to pick up the and shift their business to the bank that offers the best rate….c’mon kiwis pick up the phone and if it means moving your mortgage to the taranaki savings bank then do it!
Oh boy, I can't wait to see Robert MacCulloch rip this one to shreds...
Heather, you clearly know nothing about economics, so don't write opinion pieces about it.
The reason banks haven't cut their fixed mortgage rates is because the wholesale rates they're based on, interest rate swaps, have gone UP since the RBNZ cut the OCR (i.e. the yield curve has changed shape).
The reason interest rate swaps have gone up since the RBNZ cut the OCR is because the market now thinks that that was the last cut for this cycle, and that the next move in the OCR (whenever that may be) will likely be an increase.
You see, this is how 'the market' works - it likes to preempt (or second guess, if you will) central bank moves, as that's how market participants make their money (or not, as the case may be).
And, please, if you're going to put your opinion pieces 'out there,' do something about your grammar.
This is a Letter. To > Sir Roger Douglas
Dear Rog, May I call you Rog, there are other "names" I would like to use, but sadly the moderator's of this "channel", will have a hissy fit and delete said comment.
Why do I remit this letter, well (Dear Kiwi's observe) when you was Minister of Finance under the sainted leadership of David Lange, you did allow legislation to be created and passed that allowed them orstralians who owned banks in that land, to take to the Tazzy and row across to buy up large.
And what a spending spree they had. There was also "threats' directed toward those private banks, sorry financial business (Muldoon was not a happy chappy, and the word bank did not sit right with him, like a lot of other things) - who set up a service, in their locality, to provide a "service" that the main banks seemed to renege on.
Interesting that 2 of those "business" demonstrated the "presentation" of the index & first finger, held with the two nails, of each finger, showing toward the recipient.
And no Rog, it was not a demonstration of how clean Kiwi's kept their finger nails.
Odd, Rog, that both are doing well today, have thrived across the years.
Mind you, Rog, orstralian banks were not the only people to come to NZ and buy business - TOLL, brought NZ Rail, which at the time was a "walking deficit timebomb". Interesting they got wise and 're-sold' it back to NZ.
The Banks - we had Lloyds of London arrive, set up the National Bank of NZ and the orstralians "howled" as their customer base left them.
When Lloyds decided, they did not like being down under, it was interesting to see just how fast "Usain Bolt style", the ANZ was to buy up. The very same bank that recently, via a speech, from their current CEO "implied" that the ANZ would not brook any other competition in the NZ bank domain.
Odd that our current Min. of Finance 'stopped' talking about competition after that!
So, why all the long perlava, well read the article - it will explain just how those orstralian banks operate, something that us Kiwi's have known from away back.
So in conclusion, Rog, thanks " bloody lot " Mate.
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