It’s all been pretty quiet on the interest rates front over the last few days.
At the shorter-term end of the spectrum, we’ve still got all the big banks offering a one-year fixed rate of 4.49%, and TSB the best of the Kiwi-owned banks with 4.39%.
Looking out to those slightly longer terms, the best three-year rate out there at the moment is 4.75%. And we’ve got 4.99% on offer across most of the banks for both the four- and five-year term.
We’re not far off our next Official Cash Rate (OCR) announcement, and final one for the year, which is coming up on 26 November.
Nothing’s set in stone at this stage, of course, but parts of the market are predicting that’ll bring a further 0.25% reduction.
If they’re right—if the Reserve Bank does take us down to 2.25% later this month—shorter-term interest rates will be the ones to watch.
A lower OCR, plus a bit of help from added competition between the banks, could see the one-year rate get down to 3.99% sometime around the end of the year.
The thing to bear in mind for anyone hoping to take advantage of any further rate falls, is that with short-term rates always comes short-term variability.
What we mean by that is—if rates do get down to 3.99%, but in a year’s time (when you go to refix) they’ve risen slightly to 4.99%, then chasing those lower rates might not actually be the best strategy.
A better approach might be to fix for two-years at 4.45% instead, giving you stability and security over a slightly longer term.
It’s always a good idea to chat to a mortgage adviser who can talk you through your options, and what’s going to work best for you and your situation.
__Check back in again next week for the latest on New Zealand interest rates. __
