NZ Interest Rates Outlook for March 2012

Posted on Monday, March 5 2012

Current NZ Interest Rates as at 1 March 2012

Variable 5.60%
6 Month Fixed 5.40%
1 Year Fixed 5.45%
2 Year Fixed 5.49%
3 Year Fixed 5.85%
5 Year Fixed 6.65%

NZ Interest Rates Outlook

As mortgage interest rates remain low they continue to provide fuel to the property
market. January house sales volumes lifted for the third successive month, with strong sale prices offset by an on-going lack of available houses on the market. This shortage is continuing to drive prices up.

Tempering the growth is the unstable employment market and continuing desire of households to pay down debt. These factors together with the uncertainty created by overseas economies will help damper a major boom in the property market, however overall it is predicted house price will continue to increase albeit at a slower steady rate. The possible exception to this is Christchurch where house and rent prices are rapidly increasing.

While the Reserve Bank do acknowledge that the property market is showing healthy signs of recovery they still have their focus centered on the European debt crisis, and all the noise coming from the Reserve Bank indicates that any interest rate movements to our OCR will not occur until the back half of this year. There are however some extremely low fixed interest rates available now that cannot be ignored. I believe for some people now is a great time to look at options – please read on for more information.

Mortgage rates eased further last month especially in the longer term 3 – 5 year fixed rates. Although this has made it cheaper to fix for 3, 4 and 5 year terms, these rates are still relatively slightly higher than the current shorter term rates. Similar to last month there is very little difference between floating rates and 1 – 2 year fixed rates – as such we still believe that the best options currently in the market are to either float, look to fix for 2 years or take a combination of both, splitting your debt.

Please contact me for a free assessment of weather these low interest rates are something that would help lower your mortgage costs in the short and long term – there are some real savings to be made at the moment.

Current NZ Interest Rates

By Scott Miller – Advanced Mortgage Solutions

Christchurch Mortgage Broker Christchurch properties

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