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Speaker 1: Team B and Z and kew We Bank are the

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Speaker 1: latest banks to announce cuts to their mortgage rates today,

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Speaker 1: even if you can't log into the kew We Bank

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Speaker 1: online banking at the stage, A and Z and Westpac

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Speaker 1: had already dropped their rates earlier in the week, and

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Speaker 1: so ASB is now the only one of the big

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Speaker 1: banks to hold back a cut at this stage. Lee

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Speaker 1: Hodgits is from the Finance and Mortgage Advisors Association Gilder

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Speaker 1: Good Evening, Jack, So, what do you reckon? The banks

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Speaker 1: are just looking at that inflation data from the Consumer

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Speaker 1: Price Index earlier this week thinking the time is right.

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Speaker 2: Well, we'd like to hope so consumers have done what's

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Speaker 2: been asked of us. We pull back on spending, and

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Speaker 2: I think everyone's looking for a reward or a life

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Speaker 2: at the end of the tunnel, and that will come

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Speaker 2: in some intra straight reduction and some relief, hopefully before

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Speaker 2: the end of the year.

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Speaker 1: So to what extent do you think, given these most

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Speaker 1: recent cuts, the cuts are already essentially baked into retail

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Speaker 1: interest rates.

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Speaker 2: Yeah, well, we're looking at that or the data that's

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Speaker 2: being apparent from the drop in the lending rates anywhere

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Speaker 2: from six months through five year rates at the moment

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Speaker 2: across the board, and you called it out there. Apart

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Speaker 2: from ASP haven't moved at this point though you know,

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Speaker 2: there's some definite reduction and cuts already calculated into the

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Speaker 2: rates that we're seeing at the moment. So I guess

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Speaker 2: there's a confidence. It's not when the rates will drop,

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Speaker 2: it it's when, sorry, not if, but when and also

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Speaker 2: by how much is that going to be?

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Speaker 1: So, for example, if indeed the Reserve Bank kind of

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Speaker 1: continues on its most recent trajectory, acknowledging that they have

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Speaker 1: kind of moved a little bit in the last six

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Speaker 1: or seven weeks, but if they continue on this trajectory

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Speaker 1: where it looks like a rate cut in November is

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Speaker 1: likely and we get a twenty five point basis cut,

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Speaker 1: are we going to see the banks immediately lower interest

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Speaker 1: rates or do you reckon by that point? If it happens,

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Speaker 1: then it's all going to kind of be locked in.

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Speaker 2: Well, we're calling for the banks to pass on those

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Speaker 2: intrast rate reductions as soon as as possible. They need

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Speaker 2: to do the right thing by the consumer. We need

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Speaker 2: to see that drop in this year as well. If

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Speaker 2: it does go down point two five percent. We might

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Speaker 2: be hopeful we'll see another drop early next year, but

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Speaker 2: it's a long time between November and when the Reserve

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Speaker 2: Bank does meet again and check the OCR in the

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Speaker 2: new year.

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Speaker 1: So, if I was to go about refixing my mortgage,

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Speaker 1: would you recommend asking the banks to do better than

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Speaker 1: their advertised rates.

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Speaker 2: Look, you can do that. You're always entitled to ask

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Speaker 2: for a better rate, and also you can consider different factors.

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Speaker 2: We could split mortgages over six or twelve months into

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Speaker 2: a little bit of hedging about what the rates would

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Speaker 2: look like. And Look, my recommendation coming from an association

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Speaker 2: is gone talk to a professional and get some advice.

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Speaker 2: Mortgage advisors have access to everything, all the rates, they

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Speaker 2: can see where the movements are in the banks, and

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Speaker 2: sometimes they can have a bit of bargaining power there

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Speaker 2: on your behalf because they have all that access of

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Speaker 2: the information that there's fingertips, And it's always a good

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Speaker 2: opportunity to talk to someone and get some advice about

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Speaker 2: the best product, the best structure, all the benefits that

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Speaker 2: come with the different products and loans that you're getting,

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Speaker 2: and get some really good advice and you'll get some

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Speaker 2: good outcomes. From that going down that pathway as well.

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Speaker 1: How is the sentiment in your industry at the moment.

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Speaker 1: How are mortgage advisors feeling about this economic moment.

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Speaker 2: Well, it's tough. Everyone's doing it tough. So we've got

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Speaker 2: homeowners doing it tough with high interstrates, business people, business owners,

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Speaker 2: which most mortgage advisors are clearly, So everyone is doing

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Speaker 2: it a little bit tough, and we're just really looking

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Speaker 2: for some positive signs. And I think we are seeing

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Speaker 2: a light at the end of the tunnel, and I

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Speaker 2: think the sentiment will come in and kick in really

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Speaker 2: quickly once we see a reduction in interest rates, even

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Speaker 2: if it's a small one to start with. I think

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Speaker 2: it will just give the consumers confidence in New Zealand

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Speaker 2: a little bit of a breath to take to move

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Speaker 2: ahead and spend a bit more money and be more

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Speaker 2: comfortable and be able to afford the things that we'll

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Speaker 2: struggling to at the moment. Unfortunately.

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Speaker 1: Yeah, I mean we have seen house sales, you know,

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Speaker 1: really significantly drop compared to the rate of sales during

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Speaker 1: more prosperous times. So when there happens, does that directly

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Speaker 1: affect your industry and that do fewer house sales mean

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Speaker 1: that mortgage advisors go through a much tougher time.

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Speaker 2: Look, they can do, but in the times where they're

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Speaker 2: not writing as much business or helping as many kinds

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Speaker 2: with buying new properties, they're helping people refix, They're helping

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Speaker 2: people work out how they can afford their mortgages, looking

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Speaker 2: at different interest rate opportunities. They're spending a lot of

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Speaker 2: time helping out people and giving people advice. So they're very,

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Speaker 2: very busy at the moment. It may not be new lending,

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Speaker 2: but they're certainly they're looking after their customers and trying

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Speaker 2: to get good outcomes for them so that they can

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Speaker 2: afford and keep the houses. And that's the most important

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Speaker 2: thing is keeping keywads in their houses. Right.

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Speaker 1: So, when the Reserve Bank does start cutting rates, is

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Speaker 1: that relief likely to filter through to mortgage holders because

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Speaker 1: a lot of people will be locked into mortgages that

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Speaker 1: extend beyond that first come Yeah.

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Speaker 2: Yeah, So, I mean a lot of people have been

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Speaker 2: factoring in even over the last the most part of

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Speaker 2: this year and even early last year, just taking the

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Speaker 2: six or twelve months sixed rate. Not many people are

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Speaker 2: brave enough to be sitting out there on variable rates,

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Speaker 2: we found, but we'll find a lot of people are

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Speaker 2: have factored that in it will be coming off their

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Speaker 2: fixed straight loans towards the end of the year. So

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Speaker 2: with a bit of good advice, you might be able

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Speaker 2: to just work that through and then roll over into

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Speaker 2: a lower rate again. So most of people have come

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Speaker 2: off their very very low rate that they were fixed

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Speaker 2: on over the last few years. So I think a

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Speaker 2: lot of people have been factoring this. Then they've had

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Speaker 2: some advice up, they've been they wrapped their head around

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Speaker 2: it because we've all had to and yeah, looking forward

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Speaker 2: to that bit of a decline in the interest rates

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Speaker 2: and making it more affordable.

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Speaker 1: Right, Okay, So is there a kind of orthodoxy when

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Speaker 1: it comes to refixing your mortgage in this kind of

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Speaker 1: economic environment because over the last in a few years,

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Speaker 1: a lot more key we have chosen to split up

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Speaker 1: their mortgage than perhaps they did in the past.

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Speaker 2: Yeah. True, true. So that's a really good, a good point. So,

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Speaker 2: I mean I can talk to that I have about

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Speaker 2: three different mortgages all on the one house, but I

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Speaker 2: fixed the rates over different periods of time. They may

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Speaker 2: have been for a renovation or something else that I've done.

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Speaker 2: But I also make sure that you just you shop around,

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Speaker 2: you look at the interest rates. I've got a great

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Speaker 2: mortgage advisor too, by the way, so that's super helpful.

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Speaker 2: But I just you look at what suits you the best.

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Speaker 2: But there's always options. You don't have to be at

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Speaker 2: one bank and have one loan fixed in at one rate.

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Speaker 2: You've got the opportunity to stagger it a little bit,

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Speaker 2: which helps you when things come off or go up.

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Speaker 2: So it's very good strategy.

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Speaker 1: Ah, very good. Hey, thanks so much, Lee, I appreciate

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Speaker 1: your time. That is Lee Hodgets the Finance and Mortgage

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Speaker 1: Advisors Association. For more from Hither, duplessy El and Drive,

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