How low can interest rates go? All the way to zero it seems just as you might find in Japan and other countries.
How long will interest rate stay done? Who knows?
One theory is that interest rates must stay down for a long time simply because of money printing by central banks. If interest rates rise, then so will the interest payable by those central banks and governments on their borrowings – which could become seriously unaffordable for the economy let alone the tax payer.
Kiwibank cuts six-month home loan rate
Kiwibank has launched the lowest mortgage rate in its 11-year history, providing more signs that the highly competitive mortgage market is heating up again.
The banking minnow is offering a six-month home loan of 4.79 per cent, slashing almost half a per cent off its existing advertised rate.
The next closest contenders in the shortest fixed-term category are HBS and SBS at 5.10 per cent, with other major lenders priced at 5.25 per cent or higher.
While the state-owned bank has previously instigated several rounds of rate cutting, this time it followed the lead of Westpac and ASB.
On Monday, Westpac introduced a one-year fixed rate of 4.89 per cent, three years at 5.39 per cent and five years at 5.75 per cent., all of which lead the market.
However, they are conditional on at least 20 per cent equity and minimum new borrowing of $100,000.
Kiwibank said there were no such conditions attached to its latest deal, but promoted the rate as a “limited time special”, indicating that it may not be available for long.