The comments in the article below mirror my thoughts on the subject. I have suggested in previous articles that it is time to think about fixing a rate on any mortgages you may have because of the threat of inflation.
Interest rates at 7.5% may look cheap in the years to come. You can always part fix and part float a mortgage and hedge your bets that way. This may be the best option of all.
With regard to the infamous “break fees” that were all the rage a few years ago, I cannot believe that this would again be a problem. A bank is hardly likely to quibble accepting early repayment when it can re-lend at a higher rate.
Now’s the time to fix mortgage rates: Tower
by ROMY UDANGA stuff.co.nz
Homeowners should be fixing their mortgages at long-term rates to avoid quick and severe interest rate rises, chief executive of Tower Investments says.
At Tower’s quarterly investment briefing to day, Sam Stubbs said interest rates were likely to rise sooner than the market was pricing, to help take the steam of inflation.
Even though floating interest rates – averaging 5.75% – would look attr active to home owners, they should move to lock in at fixed rates now because the rate rises would be fast and severe.
Fixed, five-year mortgage rates with the country’s five major banks range from range from between 7.6% to 7..5%.
“This makes five-year, fixed terms look attractive,” he said….
read the rest of the article at stuff.co.nz