November 26, 2024 • 5 mins
Some positive news for mortgage holders.
The Reserve Bank has cut the Official Cash Rate another 50 basis points to 4.25 percent.
ANZ, ASB, BNZ, Kiwibank and The Cooperative Bank have all lowered their rates in response.
NZ Herald business editor at large Liam Dann says the central bank is pointing to a few more cuts over the next six months.
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Speaker 1 (00:09):
You're listening to a podcast from News Talks'd be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:17):
The Reserve Bank has cut the official cash rate another
fifty basis points to four point twenty five percent. To
break it all down, we've got Liam dan And Studio
Business Editor at Large for The New Zealand Herald get alamay.
Now was I mean, clearly it wasn't a surprise. A
lot of people predicted the fifty basis point drop. Any
indication from the Reserve Bank about where they may go next.
Speaker 3 (00:40):
Yeah, Well, they do publish a new rate track and
new forecasts. I guess it's a little different since their
last August monetary policy statement, but not wildly out of
line with the forecasts and things we've been reading about
the economy. So the economy a little bit shabby, shall
we say, going into the start of twenty twenty five,
(01:02):
seeing a recovery in twenty twenty five, but they haven't
really changed the rate track much, so it's a slightly different.
So that I mean obviously that they see more rate
cuts to come. Most people seem to think there's another
fifty basis points, but it lands around three point five
somewhere around there in the middle of the year, and
(01:22):
they haven't changed that much, and I guess it's kind
of playing it with a straight bat. The market's seen
that is a little bit, you know, perhaps not quite
as dubbish as it might have been. The dollar went
up a little bit, which means that it could have
been they could have been more aggressive around round cutting.
So they've left the pathway pretty clear to go either way,
depending on what happens in the world. For example, you know,
(01:43):
they've they've alluded to a slow down, global slow down,
and of course they won't talk about Donald Trump, but
that's a huge variable coming around. Tariff's and all that
sort of stuff.
Speaker 2 (01:53):
Certainly is here.
Speaker 4 (01:54):
And of the banks reacted yet.
Speaker 3 (01:58):
Well you would have seen probably A and Z moved
their fixed rates last night. But so far it's really
just the what I would call the standard marketing releases.
They say, oh, we've passed it on. Well, of course
you have. You've passed and it's on the floating rate,
so you expect the floating rate to pass through pretty cleanly.
Be something wrong if it didn't, but we haven't seen.
It Usually takes a little bit longer for them to
work do the maths and work out what they're going
(02:19):
to pass through on the fixed rates. But if that
A and Z move last night was any sort of guide,
it's more like sort of twenty basis points or it
won't be the full fifty that comes through on your
fixed rates over this the one year term. Something like that.
Speaker 2 (02:33):
Yeah, So for those that have gone on to floating
while they waited for this cut, is their potential for
them to wait a few more weeks to see what
happens or is it's just too hard to tell, and
if you get a good deal from your bank, take it.
Speaker 3 (02:45):
It's a very good question, because that's exactly what I did.
I think I'd be expecting something to come through around
my fixed rates in the next few days, and so
I'd imagine I'd be fixing in the next week or
so to get off the higher floating rate. Yeah, there's
another cut coming in February, but then way I do
it is split it into two halves of the mortgage,
(03:07):
so I have another going in April with the other
half of the mortgage. So yeah, yeah, everyone's got their
own strategy, right, Yeah, that's right.
Speaker 4 (03:13):
What would have to happen for them not to lower
it again, you say that they're talking about they're talking
about some weird figure like three point four, which isn't
something that you like to.
Speaker 3 (03:21):
Yeah, three point fours. It's a hypothetical figure, but they
just plot a graph and they don't really worry about
the reality of it. So that means that it's probably
three point five with some odds on landing at three
point twenty five, which would be yeah, a fifty basis
point cut, and then another twenty five and maybe another
twenty five. Yeah. Well, some of that depends on inflation.
(03:42):
So if inflation was to bounce back or didn't come
off in some of the areas that we're expecting, that
could slow them down. But otherwise it looks more like
you know that the commentary on reading is suggests that
it could actually and don't take this as gospel, but
it could actually go lower, you know. And so capital
economics are based in Singapore. They reckon they'll end up
(04:04):
cutting to two point twenty five or something like that,
which is pretty grim because they wouldn't do that nless
the economy was pretty rough next year.
Speaker 4 (04:10):
Yeah, well, that's one of the interesting things because we
all celebrate that the interest rates are going down, but
it isn't actually a big thumbs up for the economy.
Speaker 3 (04:18):
No, just just as long as you keep your job.
So yeah, it's all good, as long as your job
isn't the one that.
Speaker 2 (04:24):
Yeah, we're going to throw this question out to the
audience very shortly, Liam, But how do you get the
best deal out of your bank? So, I mean, is
it worth negotiating at this point that if you're looking
to refix and you go to your bank, or you're
broke it for that matter, and say, hey, I want
a better deal negotiate for me, is that ever worth it?
Speaker 1 (04:39):
Yeah?
Speaker 3 (04:39):
See, I'm a terrible person to ask in some respects
because I've been with my bank since I was fourteen,
so I've never really threatened to throw the toys. But
I've only only really, you know, had one mortgage one,
you know. Yeah, look, I mean you get this. You
want to get the special rate. Obviously they do a
special rate for people with a bit of capital in
(05:00):
the house. And then beyond that, I guess, Yeah, like
all negotiations, you've got to be prepared to actually walk away,
don't you, Which you are. Good luck to you. I mean,
it's quite it's quite an effort to switch banks. It's
supposed to be getting easier. That's the whole point of
all this stuff. Yeah, open banking stuff, is that we're
all supposed to be able to switch banks far more easily.
Put a bit more pressure on them to give us
(05:20):
the good deals.
Speaker 4 (05:21):
When you go and talk to your bank, do they
do they acknowledge that you're the business editor at large
for the New Zealand Herald and negotiate with you accordingly.
Speaker 3 (05:32):
Well, just to the extent that, yeah, one or two
times they've worked it out, and then they just want
to ask me what's going to happen, and you know,
we don't know.
Speaker 4 (05:41):
You could use your position say like this is definitely
what's going to happen. So this is the rate you
need to get.
Speaker 2 (05:45):
Yeah, yeah, great stuff, Leah. Always good to chat. Thank
you very much. That is Liam Dan, business Editor at
Large for the New Zealand Herald.
Speaker 1 (05:53):
For more from News Talks b listen live on air
or online, and keep our shows with you wherever you
go with our podcasts on iHeartRadio
You're listening to a podcast from News Talks'd be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:17):
The Reserve Bank has cut the official cash rate another
fifty basis points to four point twenty five percent. To
break it all down, we've got Liam dan And Studio
Business Editor at Large for The New Zealand Herald get alamay.
Now was I mean, clearly it wasn't a surprise. A
lot of people predicted the fifty basis point drop. Any
indication from the Reserve Bank about where they may go next.
Speaker 3 (00:40):
Yeah, Well, they do publish a new rate track and
new forecasts. I guess it's a little different since their
last August monetary policy statement, but not wildly out of
line with the forecasts and things we've been reading about
the economy. So the economy a little bit shabby, shall
we say, going into the start of twenty twenty five,
(01:02):
seeing a recovery in twenty twenty five, but they haven't
really changed the rate track much, so it's a slightly different.
So that I mean obviously that they see more rate
cuts to come. Most people seem to think there's another
fifty basis points, but it lands around three point five
somewhere around there in the middle of the year, and
(01:22):
they haven't changed that much, and I guess it's kind
of playing it with a straight bat. The market's seen
that is a little bit, you know, perhaps not quite
as dubbish as it might have been. The dollar went
up a little bit, which means that it could have
been they could have been more aggressive around round cutting.
So they've left the pathway pretty clear to go either way,
depending on what happens in the world. For example, you know,
(01:43):
they've they've alluded to a slow down, global slow down,
and of course they won't talk about Donald Trump, but
that's a huge variable coming around. Tariff's and all that
sort of stuff.
Speaker 2 (01:53):
Certainly is here.
Speaker 4 (01:54):
And of the banks reacted yet.
Speaker 3 (01:58):
Well you would have seen probably A and Z moved
their fixed rates last night. But so far it's really
just the what I would call the standard marketing releases.
They say, oh, we've passed it on. Well, of course
you have. You've passed and it's on the floating rate,
so you expect the floating rate to pass through pretty cleanly.
Be something wrong if it didn't, but we haven't seen.
It Usually takes a little bit longer for them to
work do the maths and work out what they're going
(02:19):
to pass through on the fixed rates. But if that
A and Z move last night was any sort of guide,
it's more like sort of twenty basis points or it
won't be the full fifty that comes through on your
fixed rates over this the one year term. Something like that.
Speaker 2 (02:33):
Yeah, So for those that have gone on to floating
while they waited for this cut, is their potential for
them to wait a few more weeks to see what
happens or is it's just too hard to tell, and
if you get a good deal from your bank, take it.
Speaker 3 (02:45):
It's a very good question, because that's exactly what I did.
I think I'd be expecting something to come through around
my fixed rates in the next few days, and so
I'd imagine I'd be fixing in the next week or
so to get off the higher floating rate. Yeah, there's
another cut coming in February, but then way I do
it is split it into two halves of the mortgage,
(03:07):
so I have another going in April with the other
half of the mortgage. So yeah, yeah, everyone's got their
own strategy, right, Yeah, that's right.
Speaker 4 (03:13):
What would have to happen for them not to lower
it again, you say that they're talking about they're talking
about some weird figure like three point four, which isn't
something that you like to.
Speaker 3 (03:21):
Yeah, three point fours. It's a hypothetical figure, but they
just plot a graph and they don't really worry about
the reality of it. So that means that it's probably
three point five with some odds on landing at three
point twenty five, which would be yeah, a fifty basis
point cut, and then another twenty five and maybe another
twenty five. Yeah. Well, some of that depends on inflation.
(03:42):
So if inflation was to bounce back or didn't come
off in some of the areas that we're expecting, that
could slow them down. But otherwise it looks more like
you know that the commentary on reading is suggests that
it could actually and don't take this as gospel, but
it could actually go lower, you know. And so capital
economics are based in Singapore. They reckon they'll end up
(04:04):
cutting to two point twenty five or something like that,
which is pretty grim because they wouldn't do that nless
the economy was pretty rough next year.
Speaker 4 (04:10):
Yeah, well, that's one of the interesting things because we
all celebrate that the interest rates are going down, but
it isn't actually a big thumbs up for the economy.
Speaker 3 (04:18):
No, just just as long as you keep your job.
So yeah, it's all good, as long as your job
isn't the one that.
Speaker 2 (04:24):
Yeah, we're going to throw this question out to the
audience very shortly, Liam, But how do you get the
best deal out of your bank? So, I mean, is
it worth negotiating at this point that if you're looking
to refix and you go to your bank, or you're
broke it for that matter, and say, hey, I want
a better deal negotiate for me, is that ever worth it?
Speaker 1 (04:39):
Yeah?
Speaker 3 (04:39):
See, I'm a terrible person to ask in some respects
because I've been with my bank since I was fourteen,
so I've never really threatened to throw the toys. But
I've only only really, you know, had one mortgage one,
you know. Yeah, look, I mean you get this. You
want to get the special rate. Obviously they do a
special rate for people with a bit of capital in
(05:00):
the house. And then beyond that, I guess, Yeah, like
all negotiations, you've got to be prepared to actually walk away,
don't you, Which you are. Good luck to you. I mean,
it's quite it's quite an effort to switch banks. It's
supposed to be getting easier. That's the whole point of
all this stuff. Yeah, open banking stuff, is that we're
all supposed to be able to switch banks far more easily.
Put a bit more pressure on them to give us
(05:20):
the good deals.
Speaker 4 (05:21):
When you go and talk to your bank, do they
do they acknowledge that you're the business editor at large
for the New Zealand Herald and negotiate with you accordingly.
Speaker 3 (05:32):
Well, just to the extent that, yeah, one or two
times they've worked it out, and then they just want
to ask me what's going to happen, and you know,
we don't know.
Speaker 4 (05:41):
You could use your position say like this is definitely
what's going to happen. So this is the rate you
need to get.
Speaker 2 (05:45):
Yeah, yeah, great stuff, Leah. Always good to chat. Thank
you very much. That is Liam Dan, business Editor at
Large for the New Zealand Herald.
Speaker 1 (05:53):
For more from News Talks b listen live on air
or online, and keep our shows with you wherever you
go with our podcasts on iHeartRadio
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