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RBNZ ‌Rate Cut Watch: what a 50 Basis Point⁤ Drop Could⁣ Mean for Your Mortgage

The Reserve Bank could cut the Official Cash Rate by 50 basis points this⁢ week – but what woudl that mean for home loan rates?

The bank will review the ‍official cash rate on wednesday.

Several ⁤economists and othre commentators have called for a drop of 50 basis points, which would take it to 2.5%.

Infometrics chief forecaster Gareth Kiernan was among ​those expecting a 50 basis point cut.

That could mean that home loan rates dropped a bit.

“Last time I looked, the market was pricing in a 60% to 70%‍ chance of a ⁤50‌ basis point cut so I would expect to ⁢see rates across the board respond ​to it to some degree,” he said.

A cut of 50‍ basis points would also‍ imply another cut in November, he said.

“It⁢ would be weird for them to do 50 and ‍then stop… so that would add to the downward pressure, too.”

For some time, commentators ⁣have been saying home​ loan rates are ‍probably almost ‍as low as thay will go.

Whether that‌ was the case would depend on what happened to the​ economy, Kiernan said.

There was starting to be some softness ​in dairy and horticulture prices, which could mean ‍the recovery next year was not as strong as previously hoped, he said.

“Having said that, we’re also⁣ nervous that ‌the ​Reserve Bank could well be overdoing it now and then need to ⁢raise ⁣rates by late 2026.

“The evidence suggests we are close⁢ to the bottom⁢ [of home loan rates] but there is still a lot of uncertainty out there.”

Westpac chief economist Kelly eckhold said‍ he was also expecting a 50 basis point cut.

One-year rates had already moved down in the past week, to about 4.49% at most⁢ banks ​he noted.

“Wholesale⁢ rates probably will fall a bit further because the full ‌chance of a 50 point cut isn’t priced in so there’s​ some