ASB Bank’s five-year fixed rate mortgage hit its lowest level in March at 6.95% since it introduced it in the mid-1990s. Then, in the wholesale market the five-year swap rate was about 5.8%. Last week after the central bank cut the OCR, the five-year swap rate again fell below 6%, but Byett says that’s unlikely to last.

Despite last week’s reaction, longer-term rates are more influenced by what’s happening globally.

The SARS virus has created yet another negative impact on the global economy, but still growth in the major economies is forecast to rise.

That should be helped by lower oil prices and declining apprehension after the Iraqi conflict, Byett says.

"More confidence in a growth scenario could see money flow quickly out of bond markets and into share markets." That would mean rising wholesale and therefore mortgage rates. He warns that the rebound could be both sharp and quick, possible as much as a percentage point over one or two months.

"You would have to have a pretty bleak outlook for the global economy and for New Zealand over the next few years" to believe lower fixed-rate mortgages are possible.

"There’s no best deal in a sense. It depends on what your own situation is, but if you want a mortgage for the longer term, you’re not looking at buying and selling and you like locked in rates, these are probably as good as you will get," he says.