Mortgage rates may plummet even further following May’s OCR decision, economists say
ANZ has dropped its one-year fixed home loan rate to 3.95% p.a., a move which means all the major banks are now offering rates under 4% across terms of up to three years.
BNZ, Westpac and TSB have also improved on their mortgage rate offers over the last week, and with more banks anticipating a potential OCR cut in May, now is a better time than ever to be a borrower and secure a mortgage.
ANZ’s ‘special’ one-year fixed home loan rate is available from 9 April, and will match the lowest one-year rate offered by ANZ last November. ANZ Managing Director Retail and Business Banking Antonia Watson also says the Reserve Bank of New Zealand will likely lower the Official Cash Rate around August, and says that ANZ’s new rate would give borrowers the opportunity to benefit from that change ahead of time.
“As New Zealand’s largest home lender, we’re committed to helping as many Kiwis into their own homes as possible,” Watson said.
“The current low-interest rate environment not only presents an opportunity for new home buyers, but for existing home loan customers to pay off as much of their debt as possible.”
The bank has not yet specified how long the rate would be made available, but said it would ‘largely depend on market conditions.’ It has also removed the need for a ‘plus-one’ ANZ product, and customers now only need a minimum 20% equity.
Westpac economists have predicted that RBNZ will cut the OCR to 1.5% in May and say this would likely make mortgage rates fall even further, thus ‘increasing the risk of stoking the housing market, which is already booming in many regions beyond Auckland.’ Nonetheless, they say that modest house price inflation means a modest OCR cut look more reasonable than it did this time last year.