Home Loan Rate Report: Long term rates start to rise

  • The resilience of the local economy over the second half of 2020 and the prospects of more improvement over 2021 impacts our outlook for interest rates, including mortgages.
  • ASB now expects the RBNZ to start raising the 0.25% OCR by May 2022. However, we do not expect the OCR to move up significantly over time, with the OCR to peak at 1.25% in late 2023/early 2024. This suggests that mortgage interest rates are likely to ‘settle’ at still-historically low levels.
  • We believe we are at (or past) the low point for mortgage interest rates.  Our forecasts suggest some modest upward pressure on all but the near-term mortgage rates over the rest of the year.

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Chris Tennent-Brown

ASB Wealth Senior Economist

Chris has worked as an economist for ASB and Commonwealth Bank of Australia in Sydney since 2005. His work has involved monitoring and forecasting trends in the New Zealand economy, with a focus on drawing implications for financial markets and investments. Chris is passionate about savings issues, and much of his current work is focussed on broadening peoples understanding of investments. Chris obtained a Bachelor of Commerce at Auckland University, majoring in Economics, and prior to joining ASB worked in the funds management industry for Bankers Trust and BT Funds Management. With over 20 years' experience in finance, Chris has also spent several years farming, and was a New Zealand representative cyclist. When not at work, Chris likes to travel, cycle, and spend time with his family and numerous pets.

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