ASB has increased the four- and five-year rates by 10 basis points, to 5.79 percent. Photo: RNZ
ASB has adjusted a number of its mortgage rates - but it is the small increase to the longer terms that may give borrowers the most insight into the likely future path for interest rates.
It has cut its six-month rate by 36 basis points, to 6.39 percent. Its one-year rate drops by 20 basis points, to 5.99 percent and its 18-month rate drops by 10 basis points to 5.79 percent.
But the four- and five-year rates increase by 10 basis points, from 5.69 percent to 5.79 percent.
Infometrics chief forecaster Gareth Kiernan had earlier said it was interesting to see mortgage rates flattening around 5.69 percent for two- to five-year terms and suggested that this could mean markets expected that to be near the bottom of the cycle.
He told RNZ on Thursday ASB's move seemed to indicate that was the case.
"It does suggest that they're possibly the bottom of the cycle. There could still be some movements going forward which are a little bit up, a little bit down but it does suggest that, given the falls we've seen over the last nine to 12 months in those longer-term rates, they could be getting close to the bottom."
He said the inflation data this week, showing the consumer price index's annual movement back within the Reserve Bank's target band, would mean an official cash rate cut of at least 50 basis points in November.
"Data over the next two or three weeks, if that continues to be on the softer side, the Reserve Bank could well look at a 75 basis point cut given it's not meeting again for another three months, until late February."
ASB executive general manager personal banking Adam Boyd said there was strong demand from borrowers for shorter-term mortgages.
"Our drops to six-month, one-year and 18-month terms in response to movement in wholesale rates should appeal to our customers refixing, as well as those looking to buy a property."