BNZ, CBS, Southern Cross, PSIS and Westpac nudge fixed mortgage rates lower

BNZ, CBS Canterbury, Southern Cross Building Society, PSIS and Westpac have nudged some of their fixed mortgage rates down by 10-50 basis points, bringing them into line with slight rate cuts by others in the last couple of weeks. Wholesale interest rates have dipped in recent weeks as expectations about the Reserve Bank's plans to start raising the Official Cash Rate have ebbed out towards later in the year. A slow recovery in retail spending and a slowdown in the housing market has seen most market players move their forecasts of the first OCR rise out to June and July. This is in line with the Reserve Bank's own comments about not raising the OCR from its current record low of 2.5% until the "middle of 2010" and about the rise in the OCR to 'neutral' is likely to be smaller than in previous recoveries. This chart from Bloomberg shows how much higher the financial markets expect the OCR to be in 12 months time. They currently expect rises of around 170 basis points over the year, but that is down from hikes of 200 basis points expected at the beginning of the year. BNZ cuts its 2 year mortgage rate to 7.1% from 7.2%, bringing it into line with ASB and Kiwibajnk. BNZ also cut its 4 year rate to 8.19% from 8.5% and cut its 5 year rate to 8.49% and 8.75%. See all mortgage rates offered by all banks, building societies and credit unions here. Southern Cross Building Society cuts its 3 year rate from 7.8% to 7.69%. CBS Canterbury cuts its mortgage rates across the board, starting with its variable rate dropping to 5.99% from 6.45% and its 2 year rate to 7.25% from 7.45%. PSIS cut its 2 year rate to 7.1% from 7.15%.