Interest Rates - What should I do?

The question being asked right now - How long do I wait before I fix my interest rate?

Last week the offical cash rate (OCR) was left unchanged at 2.50% - which was expected. It was said that the domestic economy is stronger than expected but there are still concerns about the "current frugality in global financial markets".

It would appear now that most economists now expect the Reserve Bank to hike the Official Cash Rate (OCR) by 50 basis points from its current rate on September 15th, and both economists and the central bank itself expect the OCR and floating mortgage rates to rise by around 2-3 per cent over the next two years.

So, the question to ask would be... when is the right time for YOU to fix your interest rate? That is the key when it comes to locking your mortgage in for a fixed term - it has to be all driven by your circumstances and whats right for you and your family. Personallly, none of us can directly impact or control what will happen in the economy or with interest rates, so we need to work with what is on offer and choose to fix or float as it suits our situation.

Some questions to think about:

* Is your household income fixed - can you afford to pay more in to your mortgage if rates increase?

* Do you want to accelerate the repayment of your mortgage?

* Do you understand the impact of interest only?

* Can your budget afford an increased repayment amount if you fix at a higher rate now?

* Do you need certainty in your repayments?

* Do you want flexibility to borrow more and to make bulk repayments?


If you are unsure on what move to make and when - feel free to contact one of our mortgage advisers to talk this through.

Our services are free, and our team keep themselves up to speed with the latest eceonomic news, current offers and interest rates from the lenders. We'd be more than happy to help you with your home loan decision.

Another source of general information is the Sorted website - www.sorted.org.nz

Check us out here or freephone 0508 PEOPLE (0508 736 753)



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