Wizard calls on govt to help first home buyers

Wizard cuts rates & calls on government to help first home buyers

Wizard Home Loans today cut its variable interest rates in response to the Reserve Bank’s official rate reduction. This second rate cut in two months is a welcome relief for first home buyers, but government support is urgently needed to combat the decline in home affordability, the lender warned.

In today’s decisive move, Wizard slashed its variable rates by 25 basis points, effective immediately for new borrowers and from 30 June for existing customers. Wizard now has variable rates starting from 6.55%, one of New Zealand’s lowest.

Head of Wizard New Zealand, John Grant said borrowers with an average loan of $200,000 over 25 years stand to save $32 per month. If current repayments are maintained, these borrowers can now save almost $15,000 and cut 17 months off the term of their loan.

If borrowers combine this year’s two rate cuts, they stand to save nearly $63 per month or reduce the term of their loan by around three years.

“Wizard’s decisive rate cut means more money going into the household budget and increased affordability for first time buyers,” said John Grant. “However, despite the good news, the continued spiral of rising house prices means that buying a first home is still out of reach for too many New Zealanders and we would be happy to work with the government to find ways to achieve this.”

According to an AMP - Massey University Home Affordability study, there has been a 24.4% average decline in home affordability in New Zealand in the year to December 2002. All eleven regions recorded a decline and there is little sign of a reversal in the first half of 2003.

“New Zealand needs to look at how we can make buying a first home a reality rather than a dream. Earlier this year the Government said it was considering offering help to first-time homebuyers. We are still waiting for specifics and have offered to work with Government on this critical matter,” John Grant said.

Wizard has 14 branches in New Zealand and over 170 in Australia. It plans to continue to lift its presence in New Zealand with several new branches to open over the coming months.

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