Market buoyed by rate cuts
Fixed mortgage rates, particularly two years and up, have fallen recently in response to declines in wholesale interest rates. The "step up" between floating and fixed rates has decreased, as floating rates rise in tandem with the Official Cash Rate (OCR) and many people are choosing to start fixing their loans.
"There is some value in fixing, particularly in the one to two year maturities," ANZ says in its report.
Around a third of all mortgages are currently floating, according to the bank, and it is expecting more people deciding to fix for two years.
The June and July hikes in the OCR are one factor encouraging increasing caution by buyers, although offsetting that has been recent cuts to fixed rates, which ANZ believes may start to entice more buyers into the market.
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