New Zealand’s economy is running hot at the moment. This is due to New Zealander’s spending more money at home and still having a strong export sector, especially the dairy industry.
Growth is strong, but the pandemic is still with us and still impacting financial markets. The Government and Reserve Bank of New Zealand have measures they can put in place to ensure interest rates don’t skyrocket. US economists have signalled that as their economy recovers they expect interest rates to rise. However, such rises are not likely to take effect until late 2023.
If you have mortgages and are concerned that New Zealand’s interest rates will rise, you can look to fix at some very good rates for two, three and five-year periods. After the global financial crisis hit in 2008 NZ’s economy took a few years to recover. When the recovery took place interest rates were expected to rise, but this never eventuated. We are still blessed with low interest rates at the moment which is keeping the housing market strong.
When reviewing your mortgages and interest costs, you need to be comfortable with the decision you make based on the current situation. Interest rates will rise in the future, but timing is everything. Contact the MBS team and get advice to help make your decision easier.