Interest rates have been stuck in a holding pattern over the last few days, as the market awaits the Reserve Bank’s (RBNZ) next Official Cash Rate (OCR) verdict on 9 July.
The best one-year fixed rate we’re seeing out there is still 4.89%.
For the three-year term, it’s 4.99%—which is a really competitive rate given the global uncertainty that’s still playing out at the moment, threatening to push longer-term rates up.
As to what could happen with this next OCR announcement, predictions are mixed.
ANZ’s latest Business Outlook Survey, released late last month, showed business confidence up ever so slightly in June.
Off the back of that, a number of economists are now predicting the RBNZ will opt to keep us at 3.25% for now—and just wait and see how previous cuts continue to flow through.
The fact is, though, that (despite some green shoots starting to show) the economy remains pretty weak—and so there’s a chance that we may get still that final 0.25% cut on 9 July, bringing us back to the RBNZ’s ‘neutral’ point of 3.00%.
Regardless of what happens, we’re at (or very near) the bottom of the interest rate cycle. That means there’s unlikely to be much movement in mortgage rates, or interest rates generally, from here.
Splitting your loan is still the recommendation to borrowers in this environment.
Having part of your mortgage locked in shorter-term means you’ll stand to benefit if rates do come down a bit further from here, while taking advantage of longer-term rates below 5% means you’ll have interest rate certainty over that portion of your loan as well.
__Check in again next week for the latest news and updates on New Zealand interest rates. __
