Leigh Hodgetts: Finance and Mortgage Association Country Manager on the Reserve Bank holding the OCR

Mortgage-holders will be holding their breath in after yesterday's OCR announcement.

The Reserve Bank's opted to keep the Official Cash Rate unchanged at 3.25% while signalling the possibility of further cuts. 

But new ASB research suggests interest rates remain volatile, with several opposing forces at play. 

Finance and Mortgage Association Country Manager Leigh Hodgetts told Andrew Dickens that they’re holding out hope for a cut in August. 

She says that people are looking for a bit of relief in their household spending, which would come from interest rates coming down. 

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Episode Transcript

Speaker 1 (00:00):
All right, So, as predicted by economists, of Reserve Bank
has kept the OCA at three point twenty five percent.
This comes after six consecutive cuts since last August. The
Reserve Bank reckons it needs more clarity on inflation, but
that rusted and inflation's high. Things like rates and insurance
and all that sort of stuff. But they're also worrying
about the local economy and international trade going forward. But

(00:20):
at the end of the day, for us, it means
what does it mean for your mortgage? And Lee Hodges
is the Finance and Mortgage Association country manager and joins me. Now,
good morning to.

Speaker 2 (00:28):
You, Lee, Good morning, how are you.

Speaker 1 (00:31):
I'm well. Were you disappointed that there wasn't a cut?

Speaker 2 (00:35):
Look, we certainly were, and most borrowers around the country
would have felt disappointed as well. It just I think
it's a breath. We're pausing at the moment, but we
were hopeful of at least at twenty five basis points
reduction this month, so we hold out for August.

Speaker 1 (00:51):
Now, well, exactly, Well, why do you think we need
a cut, Why do you think we need lower interest rates?

Speaker 2 (00:58):
Well, I think it's still the household spending is very stretched.
You just mentioned that the cost of living is still
really high in different areas around the country. We're seeing
different economic pressures in the regions and the city. So
what we are seeing that people are a little stretched
still and looking for that bit of relief in household spending,

(01:21):
I guess, and interest rates coming down and being able
to afford more putting money into other things apart from
paying interest to a banker is something that they would
look forward to.

Speaker 1 (01:31):
And reading the tea leaves you mentioned August, do you
think you could get a cut by then? Ll do
you think the Reserve Bank is really sitting on their hands.

Speaker 2 (01:39):
I think all the sentiment is that the Reserve Bank
will drop another twenty five basis points in August. We
feel we're getting towards that bottom or that target range
with interrastrates, and we just feel the sooner we reach
that the better. I think it will just stimulate the
market a little bit more. We're seeing a lot of people,

(02:01):
particularly first time buyers, trying to get into the market,
and I think how a little bit of a reduction
will help them again to move back in, and it'll
stimulate the housing market as well. Investors might jump back in.
It might just things might line up a little bit
better and we'll see some positive signs in both of
those directions.

Speaker 1 (02:20):
Lee, I thank you for your time today, Lee Hudgits
the Finance Mortgage Association country manager.

Speaker 2 (02:25):
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