ANZ strategist David Croy said: \u201cWhile we still expect the RBNZ to lift the [official cash rate – OCR] next month as it looks to return policy settings to neutral, lower oil prices will take some of the heat out of inflation and buy the RBNZ more time\u201d.<\/p>\n
\u201cBut it\u2019s not the case that lower oil prices mean that the OCR doesn\u2019t have to go higher, and how high it needs to go will depend on how quickly growth and confidence rebound. <\/p>\n
\u201cWhile many homeowners will welcome the prospect of a pullback in mortgage rates, the broad parameters of the quandary facing borrowers remain the same: fixing for longer gives more certainty, but costs more too, and vice versa.\u201d<\/p>\n
He said because the financial markets were pricing in a higher end point for the OCR than he expected would be needed, and because long rates were significantly higher than those for shorter terms, there was value in fixing for shorter terms.<\/p>\n
He calculated the median one-year rate would need to rise to 5.83% in a year\u2019s time before two one-year fixes would cost more than fixing for two years now at 5.29%.<\/p>\n
\u201cWe don\u2019t expect one-year rates to rise by that much and in broad-brush strokes, would add that the OCR would likely need to be nearer 4% than 3% for one-year mortgage rates to get closer to 6% rather than 5%. <\/p>\n
\u201cAnd remember, the reason why the two-year is already higher than the one-year is that markets are already bracing for hikes, so when they come, it won\u2019t be a surprise.<\/p>\n
\u201cHowever, uncertainty is high right now, and how much you are prepared to pay for certainty depends on your tolerance for risk or a possible unpleasant surprise. If that is low, a longer term, or a mix of terms may suit you better.\u201d<\/p>\n
– RNZ<\/p>\n","protected":false},"excerpt":{"rendered":"ANZ strategist David Croy said: \u201cWhile we still expect the RBNZ to lift the [official cash rate –…\n","protected":false},"author":2,"featured_media":555486,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[5195,9442,138,813,3597,1345,18060,7810,111,139,69,43965,812,131,1237,4276],"class_list":["post-555485","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-be","tag-better","tag-business","tag-edmunds","tag-fix","tag-home","tag-loan","tag-may","tag-new-zealand","tag-newzealand","tag-nz","tag-oneyear","tag-susan","tag-than","tag-two","tag-why"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/555485","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=555485"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/555485\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/555486"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=555485"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=555485"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=555485"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}