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Yes, interest rates are going up but let's keep it in perspective here.
Nov 2007 the lowest 5 year fixed rate was with ASB @ 8.6%. In May 2008 it went up to about 9.5%. It went down to 5.95% in February 2009 and has now risen to 7.25%.
Thanks for this thread. I fixed 5 yrs early last week, scraping in before the rise. Sometimes people need things spelled out clearly, I'm one of them. It took re-reading a few times to realise, heck, these rates are historically low. Cheaper even when I bought the place several years ago. Your head gets clouded and cobwebbed with other things it's hard to get the actual substance out. So, having threads like these is good.
Looks like interest rates have a winter sale coming up in July so I'll be hibernating mine, then.
What makes you say this dandan? I hope you're right as I am still sitting on variable. I think/hope long term 5 yrs will get lower but with me it's just a hunch.
I just put a lot on 5 years... mainly for cashflow planning. I was also able to shift from IO to P&I and keep my repayments about the same. Can't complain about that!
They suspect economy to get worse and rates later in year to come back down and crash further.
Hey Whitt. I wondered about that too. I suppose it's possible but if the economy gets worse, where will they borrow the money to lend out and at what rates?
The dairy owner told me when I was buying an inflation proof 50cent mixture.
Why do you want a 5 year term?
I was thinking 5 years for cashflow certainty like most others. I still have other fixed term loans so I do have interest cost averaging (they all expire by mid 2010 and I am not running around panicking about that - yet).
I do think we will get high inflation within 18 months to 2 years - probably not hyperinflation but who really knows. Maybe by the time all these 5 year terms expire 2014 we will be in the middle of the high inflation and in the poo. Maybe it is best to float or fix short term for 18 months and then fix for 5 yrs? It's all a big guess. Maybe I am better waiting until July next year and fix for 7 yrs by taking my business to BNZ (take note ANZ!!!!!!!) without paying any more break fees than I already have.
What terms are you looking to do with yours dude? I'm interested - you sound a little different from most others who have posted their opinion on the subject.
BNZ, ANZ and National banks have all announced increases to their long term interest rates today, joining ASB, TSB and Westpac to round off a week of hectic rate rises.
BNZ's three to seven year fixed rates on its Standard and Global Plus product lines are now higher but reduced its six month fixed rates.
The bank's three year standard rate is now 6.59 percent, up 0.6 percent from 5.99 percent while its four year rate is now 7.19 percent, up from 6.49 percent. Five year rates are now 7.29 percent from 6.69 percent and seven year rates are up 0.79 percent, to 7.99 percent.
However, six month fixed rates across all product lines have dropped by 0.2 percent, while no changes have been made to floating rates.
Sister banks ANZ and National banks have increased their rates again, having raised long term fixed rates as recently as Monday.
Their two year fixed rate is now 6.25 percent, up from 5.95 percent while their three year rate is now 6.75 percent. Their four year rate is now 7.15 percent up from 6.55 percent and their five year rate is now 7.50, up from 6.75 percent.
BNZ's general manager of strategy and marketing, Blair Vernon, said volatility in off shore markets has cause costs for long term funds rapidly rise.
"These significant increases have been reflected in our longer term fixed housing rates. Shorter term costs which are partially priced off domestic factors such as the OCR have eased, and we have decreased our 6 month rates to reflect this."
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