A prominent economist doesn't believe fixed mortgage rates have hit the ceiling, despite Kiwibank forecasts showing they may have already peaked.
The Reserve Bank (RBNZ) has been clear it intends to keep raising the official cash rate in order to cool inflation.
However, Kiwibank has said that might not be necessary - saying it believed the market was "perfectly priced, for now".
But independent economist Cameron Bagrie told AM fixed mortgage rates could still have more climbing to do yet.
"If we see the global economy implode… or inflation magically disappears in 2023 then, certainly, you can postulate the story that interest rate hikes in 2022 could be followed by interest rate cuts in 2023," he told host Ryan Bridge on Tuesday.
However, Bagrie said that wasn't the scenario he was anticipating.
"I think, at the moment, we've certainly got on top of what's called 'cyclical inflation' - oil prices are starting to come back down, that means your headline inflation is starting to come back down - but there are a whole lot of structural forces out there which is the real worry."
He said what happened next would depend on global inflation.
Bagrie said if inflation was persistent, central banks would not only continue lifting interest rates - but they would also remain higher for longer.
"If that pans out, maybe fixed interest rates have got a little bit more to rise," he said. "If you look at the likes of a two-year fixed mortgage rate, the base rate for that is… expectations over where the official cash rate is going to be in the next couple of years."
The RBNZ hiked the official cash rate (OCR) from 2.5 to 3 percent earlier this month and was expected to increase it by another 50 basis points in October. The central bank was forecasting the OCR to climb to 4 percent next year.
