We’re counting down the days to our last Official Cash Rate (OCR) announcement of the year, coming up on the 27th November.
The market is holding firm in its expectation that we’re (very likely) in for another 0.50% cut from the Reserve Bank, taking the OCR from 4.75% down to 4.25%
That should help to drive a bit more competition among the banks—and once the reduction flows through to mortgage rates, we should see advertised one year-fixed rates fall and settle somewhere around 5.39%.
It could also be the catalyst for three-year fixed rates to drop below 5%, making that a really attractive option for borrowers.
So, if you’ve been sitting on a floating rate for the last few months—waiting for rates to drop a bit further before locking in—it’s almost time to act
Once those rate falls have come through, the recommendation would be to lock in for at least six months—a year would be preferred—meaning that when that loan term matures, you should be rolling off onto a pretty good rate.
And just a final a note of caution for anyone thinking about holding off on fixing a bit longer, until early next year, in the hope of nabbing an even better rate.
Bear in mind that our first OCR announcement of 2025 isn’t happening until mid-February (the 19th to be exact). That means you're looking at another three months or so on an expensive floating rate, and when you weigh up the costs and benefits, that probably doesn’t make a whole lot of financial sense.
Check in again next week for our post-OCR update—and our take on what the outcome means for interest rates.
