'Home loan relief coming' after cash rate cut
'Home loan relief coming' after cash rate cut
Rate cuts on Wednesday are likely to be start of persistent shift down, commentators say.
Home loan borrowers can expect rates to fall throughout the rest of this year and next, commentators say.
The Reserve Bank cut the official cash rate by 25bps to 5.25 percent on Wednesday.
While it was a move that was forecast by several economists, it was a u-turn from the bank's position in May. Infometrics chief executive Brad Olsen described it as a "WTH moment" and "the biggest flip-flop ever".
I know this is really good for those of you with mortgages. Bad for savers, so swings and roundabouts. I had hoped the economy would sustain a higher OCR for longer.
There was another article I can't find anymore that said it sounds good - but the Reserve Bank cutting interest rates a full year ahead of expectations is a very concerning sign. Sure mortgages are going to get cheaper, but we'll also see many more people lose their jobs than originally expected. Basically the RBNZ is saying they don't need to reduce people's ability to spend, because the economy is going to do it for them.
Well, some good news for once. I've been fixing at 6 months the last few renewals, in the hope rates will start to drop.
We've also been on 6 month renewals, but only refixed last month so hopefully we see another drop before Christmas! Not holding me breath, though.