Squirrel Mortgage Brokers owner John Bolton says he doesn’t expect to see more rate drops or other banks to follow suit, after HSBC set their one and two year fixed rates at 4.25% today.
“I don’t think other banks will move their headline rates down, I think we’re really getting towards the bottom end of the market,” Bolton told NZ Adviser
“The reality is, for good-sized loans the other banks have been matching those rates anyway,” he said, noting the market has been negotiating rates at these low levels for the past few weeks.
“I certainly don’t think rates are going to get much lower – I think the reason is banks are increasingly having to focus on margin and I don’t think they just needlessly want to give away margin - the market is not growing fast enough for them to warrant chasing volume over margin.”
Bolton says when deposit rates going down to 3.5 it’s harder for banks to attract deposit money.
“There hasn’t been a lot of movement in the rates recently – I think because deposit rates can’t go much lower that’s a big part of it. Generally speaking, we’re pretty much bottoming out now in terms of rates.”
However, Kris Pedersen of Kris Pedersen Mortgages told NZ Adviser
there could be a bit more nudging down of interest rates.
“It’s so competitive out there at the moment, with the introduction of the new RBNZ
rules, banks are still going to try and get as much across the line and they probably need to do that through market share."
He says it is unlikely rates will drop below the four percent range but there might be a few more drops from the banks given the time of year.
“We are in the spring season where banks tend to go into competitive overdrive so you traditionally have your spring specials around this time of year.”