OCR left at 2.5%

The Reserve bank has left the OCR (Official Cash Rate) at an all time low of 2.5% and has signalled that there will not be a rise until this year's December quarter. They have also indicated that there potentially will be only two more increases over the next two years, so floating interest rates look to remain low.

Inflation has also dropped below the midpoint of the banks 1 - 3 per cent target range and inflation expectations have also fallen sharply. However, not everyone seems to agree with the Reserve Bank, one bank economist believes the rebuilding of Christchurch, the back log of leaky homes requiring repair and the pent up demand for property in Auckland after a slump in residential building (something we have indicated before) will add to inflationary pressures over the next few years. What does this mean, well we could see rising house prices and a construction boom coming our way as we have done in the past.

If you would like to have a chat with a mortgage expert who deals with most main banks and many other lenders about your situation then click here or call now on freephone 0800 823 823

Written by Glenn Christie, Director - Mortgage People

Disclosure Statement available on request, free of charge.