year home loan fix may be better than two
ANZ economists suggest that a one-year fixed mortgage rate is currently more advantageous than a two-year fix for New Zealand homeowners. While interest rates remain volatile, market data indicates that shorter-term fixes offer better value given current economic forecasts.
Why it matters
This financial advice impacts household budgeting and long-term debt management for property owners in a fluctuating interest rate environment.
Property experts say a one-year fixed mortgage is the way to go with current interest rates
If you’re thinking about fixing a mortgage at the moment, a one-year rate could be a better option than a two-year fix, ANZ economists say.
They have released their latest Property Focus update, which notes that house prices are largely on a “flat path”.
They said interest rates had moved in the past month as wholesale rates fell alongside oil prices when the Middle East conflict de-escalated.
Across the main banks, one-year rates are between 4.75% and 4.99%, while two-year rates are between 5.19% and 5.45%.
ANZ strategist David Croy said: “While we still expect the RBNZ to lift the [official cash rate - OCR] next month as it looks to return policy settings to neutral, lower oil prices will take some of the heat out of inflation and buy the RBNZ more time”.
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