Home owners can breathe a sigh of relief, with short-term mortgage rates unlikely to rise until late next year.

The Reserve Bank has kept the official cash rate (OCR) at 3.5 per cent and dropped any mention of raising it again soon. The OCR is closely tied to floating mortgage rates, which have risen by about 1 percentage point this year in step with the central bank's increases.

ANZ chief economist Cameron Bagrie said the bank expected the OCR would not move again until December next year and shorter-term fixed mortgage rates of one to two years were likely to be anchored around their present levels.

Rates of three to five years were more difficult to predict, because they were heavily influenced by global factors, especially the state of the United States economy, he said. New Zealanders have a collective $196 billion of mortgage debt, most of which is locked into one to two-year terms.

Choosing between fixed or floating mortgages depended on the circumstances and preferences of each borrower.

Bank of New Zealand chief economist Tony Alexander said longer-term rates had proved almost impossible to predict in recent years and if he were borrowing, he would look for some certainty and value in fixed rates up to three years.

Source: Stuff.co.nz