{"id":374267,"date":"2026-04-11T08:07:19","date_gmt":"2026-04-11T08:07:19","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/374267\/"},"modified":"2026-04-11T08:07:19","modified_gmt":"2026-04-11T08:07:19","slug":"what-now-for-home-loan-rates-business-news","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/374267\/","title":{"rendered":"What now for home loan rates? – Business News"},"content":{"rendered":"

The Reserve Bank opted to hold the official cash rate at 2.25% on Wednesday<\/a>, but indicated it was watching the path for inflation and would act if there seemed to be any wider effects on things such as medium-term inflation expectations.<\/p>\n

Infometrics chief forecaster Gareth Kiernan said he did not think any falls in wholesale markets recently had been significant enough to affect mortgage rates.<\/p>\n

\u201cAt best, the moderation in swap rates since March 23 probably just helps remove upward pressure that might otherwise have continued to push mortgage rates higher.<\/p>\n

\u201cFinancial markets have a fairly proactive Reserve Bank tightening profile priced in. And these are reflected in the pricing of mortgages.\u201d<\/p>\n

Westpac chief economist Kelly Eckhold said he expected mortgage rates to rise through this year as the time of likely official cash rate increases drew nearer.<\/p>\n

Westpac now expects the first OCR increase to happen in September, rather than December, as it previously forecast.<\/p>\n

\u201cThat likely means mortgage rates heading from the mid 4%s to low 5%s, to the 5.5% to 6% range if we assume margins continue as we have seen of late.<\/p>\n

\u201cIf the Reserve Bank surprises markets by moving rates up more quickly than priced, then mortgage rates might rise a little more quickly but perhaps to a similar ultimate level unless markets conclude the OCR needs to rise significantly above 4% at some point.\u201d<\/p>\n

Squirrel chief executive David Cunningham said it was interesting that New Zealand\u2019s yield curve had significant interest rate increases built in, while other countries did not.<\/p>\n

\u201cI think it\u2019s that our markets swing quite wildly \u2026 it\u2019s all about easing or all about tightening and if it\u2019s going to be tightening, it\u2019s going to be a massive tightening and so on.<\/p>\n

\u201cI think there\u2019s more subtlety than the yield curve builds in, but you\u2019ve just got to be patient through it.<\/p>\n

\u201cWe\u2019ve had the swing in sentiment from four months ago, where the last interest rate cuts were off the table and so therefore the next move was up, and so wholesale interest rates adjusted to that view and are predicting interest rates at 3.5% in June next year.<\/p>\n

\u201cThat\u2019s flowed through to wholesale interest rates, swap curves, which drives the fixed interest rates. You\u2019ve got three-year rates well above 5% now from a low of nearer 4.5%.\u201d<\/p>\n

He said people might think taking short-term fixes made sense because if interest rates did not rise as fast as expected, they could prove a cheaper option.<\/p>\n

\u201cYou\u2019re paying quite a premium to go into long-term rates at the moment for the certainty they provide. My overarching observation is New Zealand\u2019s market is swinging more violently than markets elsewhere in the world from an interest rate perspective, and we\u2019ve already got quite a bit of rise in interest rates built in, and so that\u2019s what you\u2019re paying for our fixed rates.\u201d<\/p>\n

He said when he fixed recently he chose two- and three-year terms, but would now choose a shorter term.<\/p>\n

\u201cIf you can cope with the uncertainty that\u2019s probably a fair deal and, you know, see where things are in six months, 12 months\u2019 time. But every situation is different. For some people, the certainty is more important.<\/p>\n

\u201cAt the end of the day, the last half-percent doesn\u2019t profoundly change your life too much. It\u2019s the 2%, 3% moves that do. I don\u2019t think we\u2019re going to see any of those sort of magnitude moves in the near term.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The Reserve Bank opted to hold the official cash rate at 2.25% on Wednesday, but indicated it was…\n","protected":false},"author":2,"featured_media":374268,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[138,813,2082,1345,18060,111,139,425,69,7676,812,6923],"class_list":{"0":"post-374267","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-edmunds","10":"tag-for","11":"tag-home","12":"tag-loan","13":"tag-new-zealand","14":"tag-newzealand","15":"tag-now","16":"tag-nz","17":"tag-rates","18":"tag-susan","19":"tag-what"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/374267","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=374267"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/374267\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/374268"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=374267"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=374267"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=374267"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}