The squeeze is set to ease

Borrowers will save on average between $300 and $460 a month on their mortgage repayments when the OCR drops to 3.25% by the middle of the year.

Westpac’s latest update on household finances shows borrowers are nearing the end of the re-fixing cycle when they were rolling on to higher rates.

Over the next six months close to half of all fixed-rate mortgages will come up for repricing.

For those borrowers who fixed up to two years ago, they could see their interest rate dropping by more than 100 basis points when they next refix (depending on when they took out their mortgage and how long they fixed for).