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Home loan customers probably missed the “bargain of a lifetime” on long-term mortgage rates, after a multibillion-dollar borrowing frenzy in the past few weeks, some economists say.

But floating mortgage rates are likely to fall further and stay down, possibly till the end of next year.
Other economists say lending rates may go lower, given a weak world economy, and there is no need to lock in rates now.
In the past week or so, five-year fixed lending rates jumped from about 6.
In a highly unusual move, Reserve Bank governor Alan Bollard said yesterday that long-term interest rates were too high.5 per cent as people suddenly switched to longer-term loans, to lock in much-lower-than-average rates.5 per cent to 7. The frenzied demand pushed rates up. .
But the rise in the past fortnight was “unwarranted” and, if rates stayed up, it could put unnecessary pressure on companies and home owners borrowing from banks, Dr Bollard said.
BNZ advised a fortnight ago to “fix now”.
Bank of New Zealand chief economist Tony Alexander says the Reserve Bank is just showing its impotence to haul down longer-term fixed rates, even though wholesale interest rates dipped almost a third of 1 per cent on Dr Bollard’s announcement.
Westpac economist Donna Purdue said the Reserve Bank was expected to cut official interest rates 50 points at the end of the month, which would bring floating rates down sharply. People had now missed that “wonderful opportunity” to lock in cheap rates, Mr Alexander said, although three-year rates remained much lower.

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