Inflation tracking as hoped, market still anticipating OCR fall in November

Inflation tracking as hoped, market still anticipating OCR fall in November

Man in suit checking his watch while waiting in an elevator

In addition to our usual interest rates update, this week’s news is all about inflation.

The latest CPI inflation numbers were released earlier this week, and thing are still tracking as hoped—very much on a downward trajectory

Inflation for the June 2024 quarter came in at 0.4%, below the Reserve Bank’s (RBNZ) prediction of 0.6%.

According to the official numbers, annual inflation is now sitting at 3.3%, just outside the RBNZ’s target range, but that should come down significantly once inflation for the September 2023 quarter (1.8%) drop out of the equation later this year.

Continuing on the same theme as our other recent updates, all the data we’re seeing out there at the moment is still painting a picture of a very weak economy.

The widespread expectation remains that the RBNZ will move to drop interest rates by 0.5% in November—although it could be sooner

That's seen wholesale rates fall by about 0.5% over the last couple of weeks—which is starting to translate through to lower mortgage rates as well.

The best one-year rate out there at the moment is 6.77%, which is down from where it’s been over the last little while. There’s evidence to suggest that rate could drop even further over the coming months, too.

Anyone looking to fix or refix their mortgage in the coming weeks would be well advised to lock in for six months.

The best six-month rate in market is running somewhere between 6.85% and 6.95%, so slightly above the one-year rate, but it means you’ll be able to transition to lower rates faster once they do start to come through.

Although it might be pretty tempting right now, we’d caution against moving your mortgage onto a floating rate—simply because it’s so much more expensive. And with some uncertainty still remaining around exactly when rates will fall, and how quickly, the benefit is unlikely to outweigh the cost.

Check back again next week for the latest news and updates on New Zealand interest rates.

Keen for the best rate and some cash too?

We've teamed up with award winning mortgage experts, Squirrel.

With over 1,425 five star reviews on Shopper Approved, Squirrel has helped thousands of Kiwis just like you secure the best possible rate when refixing or refinancing.

shopper approved logofive star revews
K

Katie

New Zealand

five star revews

Our experience with Squirrel has been fantastic. Our Advisor was friendly and professional and made what can be a stressful and complex process very seamless for us. We are thrilled with our outcome.

M

Martin

New Zealand

five star revews

Helped me get an improved rate and sorted out my needs. Great communication, kept me up to date throughout the process.

Get a free mortgage review

All fields are required