So yeah not really, as is evidenced by the graph below. If anything they might be heading towards what they were 2 years ago. Remember 2 years ago when the housing market was in a frenzy, thats how high the rates are not now. Interesting to note however the longer term rate, the 5 year one actually is as high as it was 2 years ago.
Will Trump make the rates go up higher?
A lot of Trump policies right now point to more inflation – his plan is to cut taxes and spend lots at the same time. That is like saying im going to take a pay cut and get an expensive hobby. Which either means I have a lot of cash (I don’t) or it means im going to borrow. The U.S can borrow almost endlessly by indirectly printing money. Printing money causes inflation, in saying that this means inflation in US dollars, however how that translates to us NZer’s could be a long story. In some sense traditionally you would expect us to pay more for our money if the US is hunting for the same money, however NZ has become more fashionable these days, so who knows. Trump might make the US rates go up in the long run – how that translates to NZ and diary prices will be your guess.
Best term to fix for?
It really comes down to your own unique circumstances, we can always meet online and talk about your current structure, we review a few. But I personally would be looking at putting some of my borrowed money on a longer term rate as it does seem that we can’t possibly imagine a world where our rates drop too much more. However I say some because anything is possible.
Hamish Patel – mortgage broker. Mobile: 021 625 693, hamish@monline.co.nz
