What Should We Do With Our Mortgages – Tony Alexander BNZ Economist
Posted on May 22, 2014 by Colin Wong Areinz (Waitakere Real Estate Mreinz REAA 2008)
The monetary policy tightening is an experiment, which means New Zealand mortgage holders should not take big risks with their mortgage.
How fast interest rates increase is a guessing game. Homeowners need to minimise and spread risk to combat increases. You can take the increase in cost straight away by fixing your interest rate for a five to seven year period. The other option is to fix bit by bit over the next two to four year period by sitting on floating and short-term fixed. We think rates will go up 1% this year, 1% in 2015, which means floating rates could be at 8% in 2016.
Filed under: REAL ESTATE