Last week the RBNZ Governor kept the Official Cash Rate unchanged — no surprises there. However he also reduced their forecast of future rate rises. This is something the market had predicted and we’ve seen the longer term fixed rates fall over recent months, somewhat to our surprise.  You’re now able to fix for 3 years at under 6%. One cause of this has been the strength of the NZ dollar — the high exchange rate has kept imports cheap and restrained the prices received for our exports — so helping to keep inflation down. And remember controlling inflation is the reason the RBNZ fiddles around with interest rates.

A recent NZ Herald article highlighted the fact that Westpac and ANZ have differing views going forward. ANZ’s Chief Economist foresees major risks for the NZ economy and so suggests you remain floating to see if rates fall further. But the Westpac Chief Economist thinks fixed rates are now so attractive that you should fix. He believes that it is risky to wait, as in the near future there may be a rush to fix which could drive up rates sharply, something that has happened before.

And which side of the fence are we on? Depends on what your situation is.

No that’s not me trying to dodge the question! To give you a real answer it’s best to understand your specific circumstances because the reality is some people should fix, some shouldn’t, others should do a bit of both.


About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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