What Are Interest Rates Doing?
The reality is, I don't know and nobody genuinely does. People that are far more advanced in the area of economics provide any prediction with conditions and limitations.
The traditional Kiwi strategy has been to fix for two years at a time giving some certainty, while taking advantage of the 'near to' best rates available at the time. At Holly Rogers Mortgage Adviser 027 20 20 270 we have been leaning more towards the one year fixed rate strategy to better settle new home owners into their new role.
With interest rates as low as 2.55% for one year and 2.99% for five years with no upward rate pressures there really are no 'bad' interest rate options right now. Everybodies circumstances are different and for those with little surplus income after paying their mortgage and living expenses, there is a strong argument to say that the longer term rates are now representing great value.
There is also nothing stopping you from splitting your debt and fixing the loan in two or three portions for different terms.
If you don't like taking risks, the current long term rates do provide value. However, do be wary that you are locked in for that term and breaking early to repay can come at a large cost.
What we all now know is that now is the best time to be paying debt down, as your current rate comes up for a renewal and drop. Keep your repayments the same and this will help lessen the term of your debt. Even increasing your repayments by $5 - $10 per week will have a powerful impact with such low interest rates.
Talk to Holly today, we are happy to discuss your
options and help consider what's best for you!