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RBNZ keeps the cash rate unchanged; but expects further cuts READ ON Dismiss
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Borrowers holding out for more cuts

While one bank economist thinks home loan rates won't go much lower, even if the RBNZ makes one or two more cuts, a significant number of borrowers are holding out for lower interest rates. [READ ON]

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Economists expect RBNZ to leave OCR unchanged

Benign inflation numbers put paid to any expectations Reserve Bank governor Alan Bollard to hike rates on Thursday and the debate is now focused on the first rate rise of the current cycle coming somewhere between March and June.  

Sunday, January 24th 2010, 9:09PM

by Jenny Ruth

All 12 economists surveyed by www.mortgagrates.co.nz expect Bollard to leave his official cash rate (OCR) at 2.5% where he has left it since April 30 last year.

"Whilst at the margin the recent dataflow has been inflation friendly, we expect that the bank's updated statement will read much like the ... December monetary policy statement," says Darren Gibbs at Deutsche Bank.

Gibbs expects the first rate hike will be 50 basis points on April 29. "The risks around this forecast remain weighted towards a slightly later start to the tightening cycle - at the June 10 meeting, for example."

Figures showing inflation was flat in the December quarter caused Annette Beacher at TD Securities to push out her forecast timing of the first rate hike from March to April. The data "gives the reticent Reserve Bank more flexibility to leave the cash rate at the record low level," Beacher says.

Jane Turner says "a prudent central bank should not leave the punch bowl out at the party for too long" but nothing in the recent data will push Bollard to start removing current stimulatory conditions as early as January or March.

By April, Bollard should have confirmation the recovery has become self-sustaining and will be more confident the economy can withstand the withdrawal of stimulus, she says.

Michael Gordon at Westpac says current short-term interest rates "are a long way from normal," suggesting Bollard "will be doing a lot of work over the next couple of years to return policy to more normal settings" because the economy has clearly moved into a recovery phase.

 

 

« SBS holds its home loan market shareFULL RBNZ SPEECH: OCR unchanged at 2.5% »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.44 - - -
AIA - Go Home Loans 6.54 4.89 4.95 5.09
ANZ 6.49 5.55 5.55 5.69
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 4.95 4.95 5.09
ASB Bank 6.44 4.89 4.95 5.09
ASB Better Homes Top Up - - - 1.00
Avanti Finance - Near Prime 6.90 - - -
Avanti Finance - Specialised 8.34 - - -
Basecorp Finance ▼7.15 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 5.99 5.69 5.69
BNZ - Mortgage One 6.54 - - -
BNZ - Rapid Repay 6.54 - - -
BNZ - Std 6.44 4.89 4.95 5.09
BNZ - TotalMoney 6.54 - - -
CFML 321 Loans 4.99 - - -
CFML Home Loans 6.70 - - -
CFML Prime Loans 7.20 - - -
CFML Standard Loans 7.99 - - -
China Construction Bank 6.44 4.85 4.95 4.95
China Construction Bank Special 6.44 5.85 5.95 5.95
Lender Flt 1yr 2yr 3yr
Co-operative Bank - First Home Special - 4.85 - -
Co-operative Bank - Owner Occ 5.95 4.95 4.99 5.25
Co-operative Bank - Standard 5.95 5.45 5.49 5.75
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.29 5.19 -
First Credit Union Standard 6.94 5.79 5.49 -
Heartland Bank - Online 5.99 5.89 - -
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 7.45 5.90 5.80 -
ICBC 6.50 4.85 4.95 5.05
Kainga Ora 6.44 4.89 4.95 5.09
Lender Flt 1yr 2yr 3yr
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.35 5.79 5.85 5.95
Kiwibank - Offset 6.35 - - -
Kiwibank Special - ▲6.29 ▲5.79 ▲5.79
Liberty 6.90 6.80 6.50 6.45
Nelson Building Society 6.94 4.99 4.93 -
Pepper Money Near Prime 6.85 - - -
Pepper Money Prime 6.29 - - -
Pepper Money Specialist 8.30 - - -
SBS Bank 6.49 ▼5.49 5.55 ▼5.69
SBS Bank Special - ▼4.89 4.95 ▼5.09
Lender Flt 1yr 2yr 3yr
SBS Construction lending for FHB 3.94 - - -
SBS FirstHome Combo - 4.29 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 8.64 - - -
TSB Bank 7.19 5.69 5.75 6.09
TSB Special 6.39 4.89 4.95 5.29
Unity First Home Buyer special - 4.29 - -
Unity Special 6.64 4.99 4.99 -
Unity Standard 6.64 5.79 5.79 -
Wairarapa Building Society 6.75 5.09 4.95 -
Westpac 6.59 5.49 5.55 5.59
Lender Flt 1yr 2yr 3yr
Westpac Choices Everyday 6.69 - - -
Westpac Offset 6.59 - - -
Westpac Special - 4.89 4.95 4.99
Median 6.56 5.04 5.09 5.25

Last updated: 10 July 2025 4:59pm

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