Interest rates with a four in front not far away – Squirrel

Squirrel Mortgages founder John Bolton says unfortunately, it hasn’t happened this side of Christmas, but assuming things go as expected next year, mortgage rates should be below 5% — probably between 4.8% to 4.9% — sometime in March or April.

He says it is important for borrowers to temper their expectations around what a “good” rate looks like, because they are unlikely to get back to the same low rates of under 3%, in some cases, during Covid any time soon.

“In this environment, once borrowers start to see rates with a four in front of them, they’re getting a pretty good deal.”

Meanwhile, Kiwibank is forecasting another 1.25% of OCR cuts by the RBNZ next year. That will come from a 0.50% cut in February, from 4.25% to 3.75%, followed by a 0.25% decline in April.