The view from the ANZ Economist as at January 24, 2013
ANZ's carded mortgage rates are unchanged from December, leaving the 6 month and 1 year rates of 5.25 percent as the cheapest rates on offer. Despite increasing chatter in the media that "now's the time to fix" given improved global sentiment and the rise in wholesale interest rates, we expect competitive pressure and lower bank funding costs to keep mortgages rates low for some time. Monetary policy is expected to remain on hold throughout 2013; the hurdle to both rate hikes and cuts remains high. We continue to favour a mix of 6 month, 1 year and 2 year terms with a view to re-fixing them upon expiry. Such a strategy offers a good balance between both cost and certainty.