Floating and short-term fixed mortgage interest rates are likely to remain around current levels into 2019, says ASB Bank.
In its latest Home Loan Rate Report, ASB said the Official Cash Rate (OCR) to remain on hold until November 2019 suggests floating and shorter-term fixed mortgage rates should remain relatively stable until next year.
“We expect forthcoming monetary tightening in NZ to be modest in relation to historical norms and this should limit the uplift in local short-term rates,” ASB economist Kim Mundy said. “Our bias also remains for longer-term mortgage rates to drift up, given gradual increases to the OCR and the drift higher in global longer-term interest rates.”
Mundy noted that the risk is that mortgage interest rates move up sooner (and by more) than expected.
“The catalyst could be the OCR moving up earlier and faster than what our forecasts assume, or the lift in global rates feeding through into higher local longer-term yields sooner than expected,” she stated.
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