Better Fixed Rates Ahead

ratesOdds are on for a substantial drop in the OCR rate over the coming months and banks are suggesting it could get as low as 2.5% by October.

Floating rates are likely to follow suit which is good news for borrowers who haven’t fixed their loans.   It’s bad news for depositors however and anyone relying on the interest income.

Home loan borrowers coming off fixed rate loans may not look to fix them straightaway, rather they may opt to play a ‘wait and see’ game for a while.  This inactivity may result in a drop in demand for fixed rate loans, which the banks will look to rectify with lower fixed rate offers.

The property market is likely to respond to the lower fixed rates with higher sales activity for this time of the year. The improved property values will be welcomed around the country (excluding Auckland). Wellington’s commercial property market is picking up as well as Wellington’s economy which may flow through to its residential property market.

Auckland’s property market is still on fire, with reports of good sales activity of cross lease properties. Property values throughout the Auckland region are up 17 percent.   When will the property boom in Auckland end? Probably not anytime soon.

With lower interest rates on the way, if you haven’t secured fixed rate deals on your loans already, it may be the right time to contact a mortgage broker like Kris Pedersen of Kris Pedersen mortgages. The website Sorted suggests conducting a health check on your mortgage structures regularly.

This blog article was written for PropertyBlogs by Mobilize Mail.

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