Where do you want the OCR?

Higher
5
29%
3% is fine
6
35%
Lower
6
35%
 
Total voters : 17

Official Cash Rate Cut To 3%

Postby Tama on Thu 12/Mar/09 10:43am

http://www.stuff.co.nz/business/2254521 ... -3-percent wrote:The Reserve Bank today cut official interest rates to 3 percent from 3.5 percent, meaning homeowners are set to benefit further through mortgage rates that are likely to drop to historic lows.

Economists had expected a cut of somewhere between half a percentage point and 1 percentage point. It is arguably the first time in the current "easing" cycle that Reserve Bank Governor Alan Bollard has slightly surprised the market on the low side. Previously he has tended to make bigger cuts than expected.

Today's lighter cut, after a 150 basis point cut in January, followed the Reserve Bank of Australia's decision last week to hold that country's rates at 3.25 per cent.

But today's move will still help homeowners. According to Reserve Bank figures dating back to 1964 our mortgage rates are now approaching historic lows.

The average floating rate offered by banks was 5.7 percent during three months of 1964 and has not fallen as low since, having risen steadily until 1987 where they peaked at 20.5 percent. The next closest low period was in 1999 in the aftermath of the Asian Financial Crisis, where the floating rate dipped to 6.4 percent.

ASB economist Chris Tennent-Brown says if the OCR falls to 2 percent by mid-year as his bank is predicting, then the floating rate would be expected to drop below 5 percent.


Bloody hell - just when I finally have savings in the bank the interest falls through the floor. My monthly interest pretty much halved between January and February :(

The irony is we've all been told to save and now saving is becoming a fairly fruitless exercise. It must be rough on retirees who were relying on interest to prop up their lifestyle.

Oh yeah, and won't this push our dollar lower?
Tama
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"Come on Ruthie let's dance"
Member for: 15 years 10 months

Re: Official Cash Rate Cut To 3%

Postby nzmatto on Thu 12/Mar/09 10:52am

Suits me, my 5 year rate of 7.6% comes off fixed on Monday! I like stability so am going to re-fix for another 5 years at hopefully 6% (maybe just under) and am borrowing more to finish off the house, and still will be decreasing the length of the mortgage!!! Yay!!!
nzmatto
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"Cycling changed my life."
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Re: Official Cash Rate Cut To 3%

Postby xcmtb on Thu 12/Mar/09 10:56am

There's no point in it being lower for those of us still on fixed term interest rates...
xcmtb
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"DFL - Dead Twazzicking Last!"
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Re: Official Cash Rate Cut To 3%

Postby phunk on Thu 12/Mar/09 11:04am

xcmtb wrote:There's no point in it being lower for those of us still on fixed term interest rates...


Awww.. boo hoo.
phunk
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Member for: 13 years 7 months

Re: Official Cash Rate Cut To 3%

Postby Henry Dorset Case on Thu 12/Mar/09 11:07am

21 March we come off fixed and my goal is to get the fucker paid off in three years. Do-able I think.
Henry Dorset Case
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"[b]DO THEY SPEAK ENGLISH IN WHAT?[/b]"
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Re: Official Cash Rate Cut To 3%

Postby banga on Thu 12/Mar/09 11:08am

xcmtb wrote:There's no point in it being lower for those of us still on fixed term interest rates...


You should go and break your fixed term, then you can have a moan about the penalty the bank is charging you.
banga
Member for: 14 years 5 months

Re: Official Cash Rate Cut To 3%

Postby iodi on Thu 12/Mar/09 11:10am

Tama wrote:Oh yeah, and won't this push our dollar lower?

Probably, though 3% is still relatively high so looks attractive to investors in many countries (source):
OCR.JPG
Offical cash rate in selected countries, as at 6 March 2009
iodi
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"I like dolphins"
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Re: Official Cash Rate Cut To 3%

Postby Jono on Thu 12/Mar/09 12:50pm

Yar. And the currency market had already factored in a larger drop in the rate, so the currency rose almost a cent (around 2%) after the announcement.

I created a little spreadsheet last month, and we should have our mortgage knocked off around June 2011 at the current rate. Which will be damned fine.
Jono
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"High Grade Mental Defective"
Member for: 15 years 10 months

Re: Official Cash Rate Cut To 3%

Postby phunk on Thu 12/Mar/09 12:55pm

Ima gonna save a chunk of cash when my current fixed rate expires. Pity its a couple of months away..
phunk
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Member for: 13 years 7 months

Re: Official Cash Rate Cut To 3%

Postby Jono on Thu 12/Mar/09 1:03pm

phunk wrote:Ima gonna save a chunk of cash when my current fixed rate expires. Pity its a couple of months away..


We've always been too slack to get around to fixing part of the mortgage - always had floating. There was a short period where we paid more in interest when it spiked, but for a part of that we were mortgage free anyway.

In the meantime, you could take out your rage at the world around the iniquities of fixed interest contracts by kicking a cat or something...
Jono
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"High Grade Mental Defective"
Member for: 15 years 10 months

Re: Official Cash Rate Cut To 3%

Postby happybaboon on Thu 12/Mar/09 1:10pm

I find it reassuring that in troubled times our OCR is much higher than other 1st world nations. Still plenty of room to wiggle around in order to stimulate the economy further.
happybaboon
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"Proud owner of vorb's largest"
Member for: 15 years 8 months

Re: Official Cash Rate Cut To 3%

Postby phunk on Thu 12/Mar/09 1:13pm

Jono wrote:
phunk wrote:Ima gonna save a chunk of cash when my current fixed rate expires. Pity its a couple of months away..


We've always been too slack to get around to fixing part of the mortgage - always had floating. There was a short period where we paid more in interest when it spiked, but for a part of that we were mortgage free anyway.

In the meantime, you could take out your rage at the world around the iniquities of fixed interest contracts by kicking a cat or something...


But I fixed knowing full well the consequences of what I was doing so feel no rage at all, in fact my net position is probably still positive as the floating rate was quite high at the time, and I only fixed for a year knowing that rates would come down by the time the contract finished. I did not count on a complete economic collapse though..
phunk
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Member for: 13 years 7 months

Re: Official Cash Rate Cut To 3%

Postby Colin on Thu 12/Mar/09 1:22pm

Jono wrote:I created a little spreadsheet last month, and we should have our mortgage knocked off around June 2011 at the current rate.


That way too soon - buy more bike now !!!
Colin
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Member for: 14 years 4 months

Re: Official Cash Rate Cut To 3%

Postby Jono on Thu 12/Mar/09 2:03pm

phunk wrote:But I fixed knowing full well the consequences of what I was doing so feel no rage at all, in fact my net position is probably still positive as the floating rate was quite high at the time, and I only fixed for a year knowing that rates would come down by the time the contract finished. I did not count on a complete economic collapse though..


In that case you could always kick the neighbours cat and build up a buffer in case something annoying happens in the near future.

Like getting charged with animal cruelty.
Jono
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"High Grade Mental Defective"
Member for: 15 years 10 months

Re: Official Cash Rate Cut To 3%

Postby Wobbler on Thu 12/Mar/09 2:16pm

banga wrote:
xcmtb wrote:There's no point in it being lower for those of us still on fixed term interest rates...


You should go and break your fixed term, then you can have a moan about the penalty the bank is charging you.

:withstupid:
Wobbler
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Member for: 11 years 11 months

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