Are Mortgage Rates Going Down in NZ?

Mortgage rates in New Zealand have been on the rise in recent months, reaching a high of 7% in 2023. This is due to a number of factors, including the Reserve Bank of New Zealand's (RBNZ) decision to raise the Official Cash Rate (OCR) in an effort to control inflation.

So, are mortgage rates going down in NZ? The answer is not clear-cut. The RBNZ has signaled that it will not be raising the OCR further in the near future, but it is also possible that inflation could remain high, which could lead to further rate hikes.

If the OCR does not rise further, then mortgage rates are likely to start to fall in early 2024. However, if inflation does remain high, then mortgage rates could remain elevated for a longer period of time.

Ultimately, the direction of mortgage rates in NZ will depend on a number of factors, including the global economic outlook, the performance of the New Zealand economy, and the RBNZ's monetary policy decisions.

Here are some factors that could influence mortgage rates in NZ:

  • The performance of the New Zealand economy: If the economy grows strongly, then inflation is likely to rise, which could lead to higher mortgage rates.
  • The global economic outlook: If the global economy slows down, then it could lead to lower inflation and lower mortgage rates.
  • The RBNZ's monetary policy decisions: The RBNZ will continue to monitor the economy and inflation closely and make decisions about the OCR accordingly.

If you are a homeowner with a mortgage, it is important to stay informed about the latest interest rate trends so that you can make informed decisions about your finances. You can do this by reading financial news and talking to your mortgage broker.

Here are some tips for borrowers who are concerned about rising mortgage rates:

  • Refinance your mortgage to a fixed-term rate. This will lock in your interest rate for a set period of time, protecting you from future rate hikes.
  • Make extra payments on your mortgage. This will reduce the amount of interest you pay over the life of your loan.
  • Build up your emergency fund. This will give you a financial cushion in case your income is reduced or your expenses increase.

By taking these steps, you can protect yourself from the financial impact of rising mortgage rates.

Disclaimer: This blog post is for informational purposes only and does not constitute financial advice. The information presented is not a substitute for professional financial advice. You should always consult with a financial advisor before making any investment decisions.