The home mortgage market is calming down as experts predict rate rises are coming to an end. Many believe the cash rate has now peaked, with major banks reducing some of their fixed rates. Chief executive of mortgage broker Finspo, Angus Gilfillan, says fixed interest rates have crossed a “pivotal threshold” dropping below new variable rates for the first time since January 2022.
“The current situation suggests an inflection point, where the market no longer expects interest rate rises to occur in the medium term,” he says. The average new variable rate has increased 2.5 percentage points to 5.95% in the past year, while the average new fixed rates increased by 1.7 percentage points to 5.8%. RateCity research director, Sally Tindall, says banks have been trying to rein in some of the more aggressive discounts they were offering previously. She says it’s unlikely that variable rates among the big four will drop 6% until the Reserve Bank cuts the cash rate.