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Speaker 1: Brady and Bread read. With interest rates falling over the

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Speaker 1: course of the last year, borrowers have been tossing up

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Speaker 1: when to fix and for how long as you know.

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Speaker 1: In hindsight, it now looks that a significant number of

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Speaker 1: homeowners who tried to pick the trough in the cycle

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Speaker 1: actually missed it. Jane Tips Trainey is the herold's Wellington

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Speaker 1: Business Editor's been looking at this. Janey, good evening. Hi, Ryan,

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Speaker 1: So if you're still waiting now, you've waited too long,

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Speaker 1: haven't you?

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Speaker 2: Okay? I mean you never say never. As you just described,

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Speaker 2: we live in a crazy world. But from what we

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Speaker 2: currently see, it seems like the fixed interest rates at

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Speaker 2: least it seems like they reached their bottom and around

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Speaker 2: November in December they actually started tracking up. And based

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Speaker 2: on the new economic data we've had come out this year,

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Speaker 2: it seems like the economy is actually doing okay. We've

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Speaker 2: got manufacturing as strong, services sector is strong. Seems like

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Speaker 2: actually the riskers that we might have a bit more

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Speaker 2: inflation and expected, which suggests it's very unlikely that OCR

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Speaker 2: will fall further. So it really does seem like we've

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Speaker 2: had the lowest of the rates. It seems like we've

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Speaker 2: already seen them.

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Speaker 1: You've been looking at how many were trying to pick

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Speaker 1: the trough, how many people were betting on rates dropping

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Speaker 1: further after the last OCR cut in November, Right.

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Speaker 2: Yeah, that's right. So the Reserve Bank collects all this

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Speaker 2: mortgage data from banks and according to that data, in November,

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Speaker 2: that's for the latest time that we have it for

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Speaker 2: about half of new mortgage lending done in November was

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Speaker 2: floating versus fixed, So that is actually in November that

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Speaker 2: was a super high percentage. In fact, it was forty

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Speaker 2: nine percent. That was the highest percentage on the Reserve

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Speaker 2: Banks records that go back to twenty twenty one. It

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Speaker 2: was the highest percentage of a new mortgage lending that

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Speaker 2: was floating. So you know, that suggests to me that

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Speaker 2: a whole bunch of people no November thought we'll sit

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Speaker 2: tight for a bit, We'll wait for interest rates to

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Speaker 2: fall further. Once they do, then we'll lock in for

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Speaker 2: like two years or three years, even eighteen months, but

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Speaker 2: will just sit tight for a bit longer. So what

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Speaker 2: ended up happening for those people was that in late

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Speaker 2: November the Reserve Bank did cut the o CR, but

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Speaker 2: the market after that was surprised by some of the

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Speaker 2: Reserve Banks commentary, and interest rates actually started rising. So

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Speaker 2: you know, I don't know if our listeners and readers recall,

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Speaker 2: but you know there was a sort of like a

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Speaker 2: flurry of banks lifting their longer term interest rates in December.

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Speaker 2: So for all those people who in November, there's a

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Speaker 2: large portion of them waiting for the for the cuts.

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Speaker 2: The OCR cut did come, but then unexpectedly the market

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Speaker 2: started going north because it was surprised by the Reserve

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Speaker 2: Banks commentary. So if they did, you know, at that

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Speaker 2: point want to rush to fix, that would have been

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Speaker 2: a pretty short time. Between the Reserve Bank cutting the

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Speaker 2: OCR in late November and banks lifting lifting rates, they

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Speaker 2: would have had probably only a few weeks to rush

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Speaker 2: in and lock in those those rates. You know. I

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Speaker 2: talked to a mortgage broke and he said, yes, there

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Speaker 2: was a big flurry. People did rush you know, but

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Speaker 2: of course you have to It is interesting to look

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Speaker 2: at the starter, but you do have to look at

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Speaker 2: the bigger picture. Thirty year mortgage, twenty year mortgage. You know,

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Speaker 2: there are all sorts of ups and downs, but you know,

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Speaker 2: it's interesting. It is interesting nonetheless, and you know, if

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Speaker 2: you have a big mortgage, A few percentage points does

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Speaker 2: make a difference.

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Speaker 1: I was going to say, what do we know what

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Speaker 1: the difference you know, if you've got a million dollar mortgage,

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Speaker 1: would it in the scheme of things, be a massive

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Speaker 1: difference to you whether you you know, whether you in November,

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Speaker 1: December or January.

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Speaker 2: So the hikes that the banks did was they lifted

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Speaker 2: their longer term rates by about thirty basis points, So

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Speaker 2: you know that's a notable lift. I mean, it probably

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Speaker 2: depends on how price sensitive you are, and you know,

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Speaker 2: whether you were if you were part of that cohort

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Speaker 2: that was trying to time the market sitting there on floating,

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Speaker 2: you know, paying a bit more to be on floating,

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Speaker 2: waiting to pick the bottom, then you know you might

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Speaker 2: have been a bit disappointed. Probably depends on your you know,

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Speaker 2: your your view on these things as to how gutting

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Speaker 2: that would be.

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Speaker 1: Yeah, Jna, good to have you on the show as always.

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Speaker 1: Jenay tips Trainey is The Herald's Wellington Business editor and

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Speaker 1: has a story out in the Herald about all of this.

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Speaker 1: You can go and read it ended Herald dot co

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Speaker 1: dotting z. For more from Heather Duplessy, Allen Drive, Listen

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Speaker 1: live to news Talk zi'd Be from four pm weekdays,

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Speaker 1: or follow the podcast on iHeartRadio