In less than two weeks, the Reserve Bank may – or may not – announce another OCR cut to 0.75 per cent (or even 0.5 per cent). But ASB economists believe that, this time, the mortgage rate drop will be minor.
ASB expects the RBNZ to cut the OCR 25 basis points apiece in March and May.
“Fixed-term mortgage interest rates could dip further too if the RBNZ cuts the OCR, and the wholesale interest rates fall further,” ASB’s new report reads. “In saying this, we stress that large falls in carded mortgage rates have already occurred over the past couple of years. We think that any declines will be minor (circa 0.25%-0.5%) compared with the declines recorded in 2018/19.”
But OCR cuts aren’t the only coronavirus-related news affecting the property market. The impact of the outbreak could soon hit KiwiSaver accounts, and with them, prospective first-home buyers who were relying on their KiwiSaver funds to purchase a house. As Sorted’s editor Tom Hartmann said, “The key question KiwiSaver members should ask themselves right now is ‘How soon do I need that money? If the answer is sooner rather than later, they should talk to their provider about whether they should switch to a cash fund.”
There’s a lot in flux at the moment, and now more than ever, seeking expert advice can make all the difference. If your clients have any questions about their mortgages, our Mortgage Link advisers are here to help them.
To get in touch with the team at Mortgage Link, please contact:
021 835 506
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.