Wholesale rates have continued to track steadily downwards over the last few weeks.
In the last fortnight or so, one-year rates have dropped below 5%—which is a clear sign that the market is expecting the Official Cash Rate (OCR) to come down sooner rather than later.
The general consensus out there at the moment among bank economists is still that November will be the point when interest rates start coming down again.
However, with our next OCR announcement coming up in just a couple of weeks’ time, on 14th August, there’s always a chance it could be as soon as that.
For anyone looking to refix their home loan in the next couple of weeks, the recommendation would be to hold off until after that next OCR date—potentially rolling onto a floating rate if your loan is set to mature before then—and then assess your options from there.
If the Reserve Bank does opt to drop the OCR on 14th August, it’s likely that mortgage rate falls could follow relatively quickly.
The same goes for anyone buying a new property right now, who’s due to settle in the next two to three weeks. It could be worth settling on a floating rate, and waiting to fix until after mid-August, once we have a clearer idea of what’s happening with interest rates.
If you’re apprehensive about the idea of rolling onto or settling on a floating rate, fixing short term—for either six months or a year—is also a sensible strategy.
The best six-month rate we’re seeing out there at the moment is somewhere between 6.85% to 6.95%, while for a one-year term you’re looking at 6.77%.
Check in again next week for more news on what’s happening with interest rates.
