The Reserve Bank could cut the Official Cash Rate by 50 basis points this week - but what would that mean for home loan rates?
The bank will review the official cash rate on Wednesday.
Several economists and other commentators have called for a drop of 50 basis points, which would take it to 3%.
Infometrics chief forecaster Gareth Kiernan was among those expecting a 50 basis point cut.
That could mean that home loan rates dropped a bit.
"Last time I looked, the market was pricing in a 60% to 70% chance of a 50 basis point cut so I would expect to see rates across the board respond to it to some degree," he said.
A cut of 50 basis points would also imply another cut in November, he said.
"It would be weird for them to do 50 and then stop ... so that would add to the downward pressure, too."
For some time, commentators have been saying home loan rates are probably almost as low as they will go.
Whether that was the case would depend on what happened to the economy, Kiernan said.
There was starting to be some softness in dairy and horticulture prices, which could mean the recovery next year was not as strong as previously hoped, he said.
"Having said that, we're also nervous that the Reserve Bank could well be overdoing it now and then need to raise rates by late 2026.
"The evidence suggests we are close to the bottom [of home loan rates] but there is still a lot of uncertainty out there."
Westpac chief economist Kelly Eckhold said he was also expecting a 50 basis point cut.
One-year rates had already moved down in the past week, to about 4.49% at most banks, he noted.
"Wholesale rates probably will fall a bit further because the full chance of a 50 point cut isn't priced in so there's some potential there but I think a reasonable amount of movement has already happened."
Rates below 5% were good from a long-term perspective, he said.
"It's always very difficult to kind of pick exactly where the bottom of the cycle is going to be."
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Mortgage broking firm Squirrel chief executive David Cunningham said he had been saying for some time that there needed to be two 50 basis point cuts to get the economy moving.
"They're overestimating the impact of interest rate changes on the household sector."
Monetary policy needed to become stimulatory to support the economy and get people spending again, he said.
Recent weak gross domestic product data reinforced that, he added.
"The Reserve Bank has been way behind the ball for several years and the economy is in the state it's in now very significantly due to their actions or their inactions or overreactions. You could lay New Zealand's economic woes, which are amongst if not the worst in the western world, firmly at their feet."
Last time the rate was cut the full impact was not passed on to floating rates so it was reasonable to expect about 80% of this week's drop could be seen in variable rates, he said.
"On fixed you've got about 75 basis points of cuts by February priced in already ... you've seen those fixed rates come down to 4.49%. If the Reserve Bank is decisive and says we're probably going to keep rates down here for well over a year if not longer then you could well see the wholesale rates fall another quarter percent which would ultimately probably see retail fixed rates, especially for one year maybe two years, fall by up to 25 points."
Whatever happened it would take more than falling interest rates to reinvigorate the housing market., he said.
"One of the things the economists are saying is house prices will rise 5% next year and I I don't think they will because you've got lots of building going on and you've got very low immigration. The catalyst for house prices to start moving north instead of sideways is immigration."
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