ANZ Property Focus says as a result it makes sense to consider fixing, with two years being the "sweet spot."
It expects policy to be on hold for the rest of the year, however looking 2011, with the Rugby World Cup kicking off and earthquake rebuilding set to get underway, ANZ finds it hard to see the Reserve Bank leaving policy on hold beyond March.
It says two-year fixed rates are only 49 basis points above the floating mortgage rates and are "cheap" relative to the Reserve Bank's projections.
ANZ says the Reserve Bank held an upbeat tone in June warning of taking the OCR to 6% over the next two-years, however they now see the recovery as being more tepid, with the OCR set to rise gradually to around 4.5%.
"Given our view that the Reserve Bank has potentially swung too far and taken too downbeat a view on the economy, we do see some risk in their projections being revised higher."
Westpac Weekly Commentary says it expects the next OCR hike to be delayed until March 2011 as does BNZ Markets Outlook with the markets pricing in roughly 50% chances of 25 basis point hikes for the subsequent meetings next year.
Westpac says the Reserve Bank seems more focused on credit growth than actual activity and on past wage and price inflation rather than expectations.
"It will take some time to restore their battered faith in the recovery story."
Westpac says the Reserve Bank's change of heart suggests that floating rates will stay on hold for some months. It says fixed term rates could rise in that time, but only if there is a substantial turnaround in the global economy. It suggests there is no urgency to fix right now.
J P Morgan Weekly Prospects is forecasting the next OCR hike to be delivered in December but says the risks are skewed toward a later move if the domestic data continues to disappoint.
