ASB: Rates may not get much lower
ASB's team of economists, led by Nick Tuffley, say the "big moves down have already occurred" on mortgage rates. They believe pricing will remain at "historically low levels over the year ahead".
The team believes banks will be mindful of pressures on term deposit rates, and will be reluctant to slash mortgage rates further.
"It’s also not all about mortgages – banks have so far been reluctant to aggressively cut most term deposit rates in the wake of the large August OCR cut, as they still need to attract savers to invest."
"The competitive pressures to attract term deposits are an opposing force on mortgage rates, contrasting the downward pressure from the lower OCR and lower wholesale interest rates that prevail at the moment," the bank adds.
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