21 Oct 2022

Mortgage hikes peak may be near, Squirrel founder John Bolton says

1:58 pm on 21 October 2022

Further mortgage rates hikes may not be as severe as feared, according to a local mortgage broker.

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Photo: Supplied/ Dan Bailey

Four retail banks have raised interest rates this week with homeowners being warned to brace for further rises as the Reserve Bank ratchets the cash rate higher as it battles inflation.

Fixed-term home rates have gone up between 44 and 54 basis points - with rates now ranging between just under 6 percent for a 12-month loan to 7.29 percent for a five-year loan.

Squirrel founder John Bolton believes the peak of rate rises may be near, but concedes opinion is divided.

"My view has been that peak housing rates would be sitting about 6 percent," Bolton said.

"One-year fixed rates today are sitting at 5.99 percent - my view is that we are there or thereabouts.

"It is largely done, notwithstanding there could be some small rates increases from here.

"We are all second guessing until the Reserve Bank comes out in mid-November with the next official cash rate announcement."

Bolton said banks will keep their lending rates as low as they can due to meet competitive pressure in the market.

This will come at the expense of savers who are not receiving comparable increases on their term deposit returns and savings accounts.

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