New Zealand's mortgage rate curve flattening fast

This chart is worth publishing on its own and tells the story of New Zealand's flattening mortgage rate curve. These charts are compiled from average bank mortgage rates collected by interest.co.nz. The prospect of a 150 basis point rate Official Cash Rate cut to 5% and ultimately a 4% OCR will do more accelerate this trend, particularly as the sharp falls in 6 month mortgage rates are dragged forward to the variable rates. At the current rate of flattening New Zealand could have a positive yield curve by mid next year, delivering some extra monetary policy power to the Reserve Bank. Although it was interesting that ANZ National CEO Graham Hodge believes this may become a temporary phenomenon once interest rates stop falling and New Zealanders accustomed to volatile interest rates move to protect themselves again. * This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.