Skip to main content

Financial Risk Sharing in New Zealand's Residential Mortgage Market

Buy Article:

$46.75 plus tax (Refund Policy)

Suggests that a form of modified variable rate mortgage (VRM) should be the type of mortgage that is most attractive to the majority of owner-occupiers in New Zealand. VRMs are shown to be lenders' choice of mortgage because their traditional reliance on retail deposits and other forms of short-term finance necessitates that their assets be of similar duration. In exchange for unilateral rate-setting powers, lenders compensate borrowers (to a degree) with relatively low administration costs. Though it appears that the range of mortgage products available in New Zealand is now too narrow, this is beginning to be rectified by new products that offer more conservative borrowers the ability to reduce risk. Finally, analysis of historic mortgage margins indicates that there are differences between lenders. Solely on the basis of rate-setting practice, though no lender appears to have been able to charge significantly higher margins than all of the other lenders, one institution has offered significantly lower margins.
No Reference information available - sign in for access.
No Citation information available - sign in for access.
No Supplementary Data.
No Data/Media
No Metrics

Keywords: Borrowing; Financial Risk; Interest Rates; Mortgage Companies; New Zealand; Residential Property; Usa

Document Type: Research Article

Publication date: 1994-01-01

More about this publication?
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more