If rates pan out as I expect then you’ll pay 20% less interest using short-term rates. On a $400,000 mortgage that equates to an extra $32,000 off your mortgage in five years’ time
Revolving credit is one of those gems that advisers like us pull out to look intelligent. It’s not for everyone, but to my mind revolving credit rocks!
The rationale for this is to avoid having your entire mortgage mature at the same time. By staggering your mortgage across multiple fixed-rate terms, you reduce your exposure to steep mortgage rate hikes later on
My preferred fixed term remains one-year fixed at 5.39% or 18 months at 5.79% – and probably splitting the mortgage between both to give two bites of the cherry.
2009
Why Short-Term Mortgage Rates are Best
Filed under: Interest Rates, Mortgages, NZ Economy
My view is that the highest one-year housing rate in the next five years will be 8.50% based on the OCR getting to 7%. Long-term rates only look attractive if you buy into mortgage rates shooting back up to 9.50% again. In my mind this won’t happen anytime soon and is irrational fear
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