Nigel Perkins, Director at Haven Mortgages shares how the increased OCR will likely impact borrowers.
Behind the Official Cash Rate
“The double-edged sword of containing inflation vs responding to one of NZ’s most significant natural disasters is a mighty balancing act to navigate.
How the Reserve Bank looks at a red stickered Muriwai Beach homeowner in the eye and says, “You’ll have to pay up to 0.5% more for that mortgage on your home that you can’t access” – that’s incredibly tough when you’ve already been forced to pay to rent elsewhere, all while your insurance claim is a murky proposition, at best.
The OCR is a blunt macroeconomic tool designed to control the flow of money.
Right now, the flow of money couldn’t be more polarising. The sheer brutality of this monetary policy change will be the final straw for many Kiwi families, just to try holding on tight to what they’ve got!
So, what does the increase in OCR mean for you?
How much will rates actually rise? At this stage, you can reasonably expect all floating rate loans to pop up very soon.
We’re not expecting too much movement, if any, around the 2 yrs plus fixed terms (ie 2 yrs – 5 yrs).
Likewise, expect a good slice of the 0.5% increase to be passed through to terms up to 18 months, soonish.
How can Haven help your home loan with an increased OCR?
At Haven, we’re fully committed to ensuring the best options are navigated for every client’s unique circumstances.
When it comes to navigating fixed rates and mortgage negotiation, time is the enemy. The quicker you jump onto reaching out for assistance, the better the likelihood of providing the best options for your circumstances.”
Get in touch with the team today if you’d like a chat to see how Haven can help!
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