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When Will Fixed Home Loan Rates Move?
Susan Edmunds, Money Correspondent
Banks have shifted their floating rates in response to this week's official cash rate (OCR) cut, but borrowers may have a little longer to wait before fixed rates move.
The Reserve Bank cut the OCR by 25 basis points on Wednesday.
The main banks all responded that afternoon with reductions to their variable lending rates.
Fixed rates remain between 5.19 percent and 5.29 percent for one year and 4.99 percent for two.
At the peak, special rates were more than 7 percent across those terms.
David Cunningham, chief executive at Squirrel, said one- and three-year rates might move to match the 4.99 percent rate in the next week or two.
Westpac earlier briefly offered 4.99 percent for three years but then withdrew it.
"Beyond that a drift down towards 4.75 percent in the one- or two-year terms will probably take a month or two and will be driven by competition," Cunningham said.
Simplicity chief economist Shamubeel Eaqub said, with swap rates close to 3 percent, fixed rates just under 5 percent would make sense.
Infometrics chief forecaster Gareth Kiernan pointed to bond yields, which picked up sharply overnight.
But he said, notwithstanding that, there was renewed downward pressure on retail rates because of the decline in swap rates over the past week.
The one-year swap rate has fallen from just under 3.7 percent in the middle of January to just over 3 percent. The two-year has fallen from about 3.6 percent to roughly the same level.
"Banks might we holding off to see where the dust settles, but I'd expect to see cuts of around 20 basis points across all fixed rates coming through next week if swap rates remain around where they currently are," Kiernan said.
In February, there was $5.8 billion of new mortgage lending, down from the activity at the end of last year but almost $1b more than in February 2024.
Most lending is due to refix within the next year.
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