Yesterday afternoon, the Reserve Bank of New Zealand (RBNZ) announced that they are keeping the Official Cash Rate (OCR) at 5.5% for the eighth consecutive time.
In a surprising pivot, the RBNZ has shifted to a more relaxed stance on the future whereas just 7 weeks ago, their outlook was more pessimistic. In the lead up to this announcement, many bank economists were forecasting a reduction in the OCR later this year and it seems now that interest rate relief might come sooner than expected.
What does this mean for you?
- Interest Rates:
We might see some shifts in fixed mortgage rates sooner rather than later. Previously, many borrowers opted for the 1 year fixed rate. Now, considering the RBNZ’s recent comments, the 6 month rate might become more attractive. Any future reductions in rates could provide some much-needed relief for borrowers.
- Property Market:
A decrease in interest rates could encourage those who have been waiting on the sidelines to enter the property market, potentially giving it the boost it needs during these winder months. This could be an opportune time if you’re considering buying, selling, or refinancing your property.
- Economic Outlook:
The RBNZ’s decision reflects their ongoing efforts to manage inflation and support economic stability. While global economic growth remains slow, there are signs that inflation will return to the target range or 1-3% by the second half of this year (a positive sign for the broader economy).
Read The Reserve Banks meeting summary HERE
Here at The Mortgage Supply Co, we are here to help you navigate these changes and find the best solutions for your specific needs.
If you have any questions or would like to discuss how this update affects your mortgage or property plans, please don’t hesitate to reach out.
