Home loan interest rates are likely to be lower in six months’ time than they are today, Westpac’s chief economist says.

Dominick Stephens, Westpac's chief economist is predicting a 50bps point cut in the official cash rate this year, probably in June.

He said that would mean floating rates were highly likely to fall and there was a good chance fixed rates would follow.

ANZ’s chief economist, agreed it was possible that mortgage rates would come down further. But he said there was too much fixation on what the Reserve Bank was doing, forgetting the other factors that would drive home loan prices.

ASB is also predicting an OCR cut, predicting that the OCR will stay at 2% until March 2018, lower for longer than the generally-held market view. The ASB outlook was driven by prediction of ongoing weak inflation, but said there were a lot of “moving parts” that would determine how much of the low OCR would filter through to home loan rates.

There were potential ripple effects such as the rise in risk premiums in markets in which New Zealand secures foreign funding.

Source: www.mortgagerates.co.nz