Story: Prices and inflation

Interest rates, 1966–2008

Interest rates, 1966–2008

Interest is the price that borrowers pay to obtain capital. This graph compares the changing interest rates of first mortgages for house loans with the interest the banks pay those who invest in a six-month savings bond. In general the difference between the two rates is what the bank earns. It was about 2.5% through this period. The rise in rates from the early 1970s to the late 1980s represented the period of general price inflation in New Zealand.

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How to cite this page:

Adolf Stroombergen, 'Prices and inflation - Price of labour and capital', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/graph/23100/interest-rates-1966-2008 (accessed 23 March 2019)

Story by Adolf Stroombergen, published 11 Mar 2010