OCR down, mortgage rates down

The Official Cash Rate was dropped to 2.5% yesterday to the lowest rate ever, down from 2.75%. It is thought that this will be as low as it goes.

Mortgage rates also dropped again. Kiwibank has the best floating rate, reported to be 5.65% (their website still shows it at 5.99%).

Westpac currently offers the best fixed term rate special, 4.24%  for 2 years.

NZ Herald reports: Now’s the time to fix your home-loan rate, says expert

Homeowners are being urged to fix their mortgages now to make the most of record-low interest rates – which experts say are at rock bottom.

BNZ director of retail and marketing Craig Herbison said homeowners stood to miss out on years of savings if they didn’t take advantage of the lower rates, which had likely reached their plateau.

Loan Market mortgage adviser Bruce Patten said further cuts to the cash rate were unlikely and now was the time to fix.

“The message from the Reserve Bank was, ‘Don’t expect a cut next year’. Our advice to people in the last few weeks has been, ‘If you want certainty, now is the right time to fix’.”

Rates are close to half what they were a few years ago.

Homeowners should be looking to fix their mortgages for two or three years, he said. Rates for those terms were between 4.2 and 4.5 per cent a year – a big saving for people who might have fixed for one year 12 months ago, when one-year rates were around 6 per cent.

A homeowner with a $400,000 mortgage taken over 30 years could potentially save $372 a month, or $4464 a year, by fixing at 4.5 per cent, compared to 6 per cent.

So a $200,000 mortgage over 30 years could save abour $180 per month, about $2200 per year.

This will help many homeowners, but will also benefit people in business.

Presumably some dairy farm owners will be getting mortgage payment relief from lowering interest rates that will in part at least offset the low dairy prices.

Leave a comment


  1. Nelly Smickers

     /  11th December 2015

    There can be no doubt we are in a deflationary spiral – also known as a depression. And the implications are clear for the global economy. All key markets are down and we are seeing prices plunge in oil. gold and copper. Next stop for oil $20 a barrel, gold at $1000 oz will be nothing but a fond memory. We are looking at a stock market and banking wipe out as the losses get too big to hide.

    This is as bad as gets 😦

  2. Nelly Smickers

     /  12th December 2015

    Sounds like there might be a few ‘worried Billionaires’ in China at the moment…….they say organ harvesting is on the rise as well 😦



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