OCR Slashed 0.75% to 0.25%

This morning the Reserve Bank has slashed the Official Cash Rate by 0.75% to 0.25%. We have never been here before folks. Historic.

Floating interest rates and short term fixed interest rates should get a trim depending on how much of the margin main Banks don’t keep for themselves.

Swap Interest Rates collapse

On one day back in late June 2016 when the UK voted for Brexit our 5 year swap rate fell by 7% to 2.32%.

With a global flight from equity to bond markets this week our 5 year swap rate stands at a meagre 0.77%.

Fixed interest rate falls beckon for mortgage holders.

OCR Slashed to 1%

Today the Reserve Bank slashed the Official Cash Rate from 1.50% to 1%. This is the lowest rate in NZ’s history.

Swap rates which largely determine fixed interest rate pricing moved substancially.  The 5 year swap rate declined by 11% to 1.06%.

Variable and fixed interest rates for borrowers should fall as a result depending on how much is passed on to borrowers by the Banks.

OCR Held @ 1.50%

The Reserve Bank held the OCR at 1.50% today but cited “….weaker global economic outlook and the risk of ongoing subdued domestic growth, a lower OCR may be needed over time to continue to meet our objectives.”

OCR Cut to 1.50%

The Reserve Bank has today cut the OCR from 1.75% to 1.50% citing “continuing house price softness in some areas” which means in Auckland.

It seems unlikely that the 4 main Banks will pass on the full 0.25% cut to their floating interest rate borrowers.

PH: 0800 2 FINANCE. Auckland Based Mortgage and Insurance Assistance Since 2002