The Reserve Bank has cut the Official Cash Rate to 3 per cent.
The New Zealand dollar fell along with other commodity currencies ahead of the expected interest rate cut.
Since September the central bank’s tightening bias has been on hold, and last month it cut rates, while signalling further cuts could come.
Curbs on foreign house buyers are predicted within two to three years by BNZ chief economist Tony Alexander.
Home owners can now fix their mortgage rate for below five percent, following further cuts to mortgage rates by the major banks following cuts last month.
New Zealand house prices continue to rise, with the fastest national growth recorded in over a year and the fastest Auckland growth recorded in over a decade.
Cheap, short home loans offer instant savings for home owners who are on floating rates, making fixing your mortgage more appealing than ever. But if you want certainty for more than a year or two, you face higher rates.
The major banks have made moves that have cut mortgage rates recently and it makes fixing for the short term appealing compared with floating rates, which are up around 6.4 or 6.5 per cent.
Currently the only disadvantage of fixing is losing your short term flexibility, meaning you may miss the absolute bottom of the market if interest rates fall further than predicted, says ASB’s Nick Tuffley.
Source: Stuff.co.nz
