OCR bottoms out.

Gerald Mullaney

19 Feb 2026

The outlook has become clear that the OCR maybe on hold until Dec 2026 it will only start to increase if inflation is out side the bound of 1 to 3%. Therefore the view is that the OCR has reached a bottom being Dec 2025, unless something causes it to go lower like deflation or some form of crises. Therefore the only way that mortgage interest rates will drop from here will depend on swap rates and currently swap rates as at 18 Feb 2026 are falling, this could cause retail rates to fall back. There is still a chance in 2026 if swap rates do continue to trend down that a good rate maybe able to be secured sometime in 2026. At this point in time the view is a three rate at 4.49% would be the deal, if a four or five year rate appears at 4.49% to 4.99% this maybe a low is it would go. The view is we are not going to see rates in the three's unless there is a huge crises. Fixing long term below 5% provides security and certainity.