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Speaker 1: You're listening to the Saturday Morning with Jack team podcast

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Speaker 1: from News Talks at Me.

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Speaker 2: It's time to talk money, and Lisa Dudson is with

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Speaker 2: us this morning.

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Speaker 3: Killed her Good morning Jack.

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Speaker 2: Oh well, it was the sigh of relief heard around

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Speaker 2: the country, wasn't it. The ocr having its first cut

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Speaker 2: just twenty five basis points for the time being, after

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Speaker 2: a period of extended pain for many mortgage holders. But

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Speaker 2: how do you think the average person with a mortgage

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Speaker 2: is actually going to be reacting to this? When are

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Speaker 2: we really going to see some significant change?

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Speaker 3: Yeah? Well, I mean, look, it's good news, no doubt

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Speaker 3: about that, right, But there's there's a big lag and

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Speaker 3: that's a challenge, right because you know, interstrates went up

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Speaker 3: quite significantly two years or so ago, but the pain

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Speaker 3: has been felt more this year than last year. So

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Speaker 3: you know what we find now obviously his ingistrates are

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Speaker 3: starting to come down. There's lots of little cuts. I think,

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Speaker 3: you know this five point nine to nine percent eighteen months,

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Speaker 3: which is you know, that's pretty attractive. We'll probably see

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Speaker 3: you know, I'm not economists, but most people I've seen

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Speaker 3: to talk to you think will be well into the

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Speaker 3: low f lives by the end of next year. That's

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Speaker 3: crystal ball gazing all with it. But so you know,

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Speaker 3: so that's all good, right, But the challenge is is

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Speaker 3: in New Zealands, most people have their interest rates fixed,

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Speaker 3: so they're locked in for a period of time, so

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Speaker 3: they won't get the benefit of that until the moll

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Speaker 3: wall just come off those fixed rates, which could be six, twelve,

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Speaker 3: eighteen months, two years away.

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Speaker 2: Yeah, this is the and so this is why when

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Speaker 2: I mean it works in both directions. Right when the

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Speaker 2: ocr was being increased, it took a bit of time

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Speaker 2: for the full impact of those increases to actually hit homeowners.

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Speaker 2: Now the same thing happens in reverse.

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Speaker 3: That's right, And I think I think the note of

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Speaker 3: caution too is that you do have to be mindful

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Speaker 3: about breaking your six term LUNs, right, because that's what

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Speaker 3: a lot of people do. They go great with I've

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Speaker 3: got a seven in my and my rates at the

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Speaker 3: second ash, I can get down to five point nine

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Speaker 3: to nine. Let's go and break the rate and refix

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Speaker 3: the low rate. However, that's not easy because what happens

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Speaker 3: is the banks penalize you for breaking both rights. So

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Speaker 3: if you have got that, if that's in your headspace

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Speaker 3: and you're thinking about that, Please please go and see

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Speaker 3: your mortgage divisor and just work through the implications of that,

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Speaker 3: because for most people you're just going to have to

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Speaker 3: write it out.

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Speaker 2: Yeah, that's right, and it's not too complex to do

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Speaker 2: the sums right like sometimes there can be a little

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Speaker 2: bit of a difference, but for the most part, I mean,

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Speaker 2: the banks are very much, you know, very familiar with

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Speaker 2: this concept, so you know that they will you know

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Speaker 2: there will be penalties and implications if you do decide

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Speaker 2: to break. How do you think also, how do you

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Speaker 2: think then that people who are going to be fixing

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Speaker 2: sometimes soon should be should be thinking about the trajectory

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Speaker 2: for interest rates in the OCR over the next wee.

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Speaker 3: While I don't think they need dispute that it's going

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Speaker 3: to be heading south, right, So I guess that if

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Speaker 3: you've got a extreme rate coming up for you'll fairly

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Speaker 3: soon you again talk to your mortgage avisor and get

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Speaker 3: some advice, but you probably want to be looking at

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Speaker 3: six months and just rolling those six months until those

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Speaker 3: rates come down. Although having said that, though you know,

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Speaker 3: five point ninety nine is probably not too bad for

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Speaker 3: eighteen months because if it's that averaging out that you

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Speaker 3: need to you know, consider So for instance, if you've

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Speaker 3: got you know, you're locking something into eighteen months, what

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Speaker 3: is the amount of interesues you're paying versus three six months?

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Speaker 3: Roll over it? Yeah?

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Speaker 2: Yeah, Do you reckon that the banks are going to

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Speaker 2: be really competitive over this?

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Speaker 3: I don't know.

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Speaker 2: I mean no, but I mean, I just it's funny

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Speaker 2: because you know, like people get excited, right so this

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Speaker 2: feels like there's you know, like mortgage holders are kind

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Speaker 2: of excited about the about the direction of interest rates

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Speaker 2: over the next wee while. And I just wonder if

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Speaker 2: if they are likely to be more competitive as rates

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Speaker 2: are increasing or as rates are going down. It'll be

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Speaker 2: interesting to see, you know.

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Speaker 3: When they're quite proactive with the pups because I think,

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Speaker 3: you know, there is a bit of data right there

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Speaker 3: that they making lots cuts, but they all be at

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Speaker 3: their tiny cap and you know, and when they get

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Speaker 3: the cuts, they get a bit of eartime and a

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Speaker 3: bit of media coverage, right, so that's quite good for

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Speaker 3: their branding. But banks make good margins, and you know,

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Speaker 3: they make better margins than what they do in Australia

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Speaker 3: in general, and you know they're going to be holding

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Speaker 3: onto those margins and they need to hold onto those

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Speaker 3: margins because they have a responsibility to the shaarholders as well.

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Speaker 3: Yeah right, so you know, you know, it's hard to

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Speaker 3: answer that.

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Speaker 2: Yeah, I don't know if they'd be more more likely

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Speaker 2: to be competitive on the way up and more likely

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Speaker 2: to be competitive on the way down. Something tells me

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Speaker 2: that the end of the day, just like the because

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Speaker 2: you know, the banks win.

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Speaker 3: Yeah yeah, yeah, well that's rights. You just need to

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Speaker 3: look at the year prices and they do it into

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Speaker 3: the shaarholders and the last you know, we run and

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Speaker 3: they've always been a you know, a great stock to

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Speaker 3: invest them.

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Speaker 2: Yeah yeah, yeah, exactly. Well, like you say, though, some

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Speaker 2: reason for optimism from mortgage holders. Thank you so much, Lisa, Lisa,

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Speaker 2: welcome Lisa duds in there.

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