A rapid decline in inflation would likely see short-term interest rates fall significantly over the next year. For longer-term interest rates, there’s likely to be a continued downward drift as we creep closer to anticipated OCR cuts. Impact on home loan interest ratesFor starters, bank interest margins on fixed-rate home loans – a.k.a. what they charge over and above where wholesale interest rates are at – are currently extremely wide. But when it does happen, sooner or later, that will be the catalyst that sets home loan interest rates tumbling down again.

Source: New Zealand Herald February 03, 2024 08:32 UTC