So why are many commentators predicting much nicer interest rates shortly? The wholesale rates have taken a bit of a nose dive in the past couple of months. But the bit missing has been the flow through to us consumers.
In New Zealand the swap rates are the cost of interest rate certainty between banks. It does give us a strong indication of where the cost of funds currently sit.
Early December we saw this creeping down and in that one month there has been a downward movement of approx .5%. When taking into account movements from November till now we have seen an approx 1% decrease in this rate.
However we have hardly seen any movements in the fixed rates, perhaps there has been a .1% here or there in the past two months.
A good place to keep an eye on swap rates are the charts available on interest.co.nz
Best strategy for fixing now
It seems the best strategy right now is to approach fixing your rate in a relaxed fashion. As there is more likelihood of them going down than up. How to fix for is a much bigger question as there is no good general advice for this. The only thing to remember is that it almost impossible to guess what the interest rates might do in the coming years.
It is best to formulate your strategy with a home loan adviser such ourselves that understands your personal situation, level of fortitude and need for certainty.