Mortgage borrowers can breathe a sigh of relief that floating rates are not expected to increase anytime soon with economist predictions pared back by 75 basis points since two months ago.
Reserve Bank Governor Alan Bollard held the official cash rate at 3% today, as expected, and said the track for future rate hikes would be "more moderate" than previous forecasts, as the Christchurch earthquake disrupts an already slowing recovery.
In July economists expected there to be increases to the Official Cash Rate (OCR) in November and December, but since today's statement by Bollard, an increase is not now expected till February 2011 as seen in the graph..
This means those staying on floating rates can pay down as much debt as possible before floating rate starts rising again.
