Should you fix or float?

Heres ANZ’s Mortgage borrowing strategy in this months edition of Property Focus

Average mortgage interest rates across the “big four” banks are slightly lower for some terms compared with a month ago. There is just 0.01% separating the 6 month, 1 year and 2 year rates, which mark the low points on the curve, and are thus the most attractive rates from a cost perspective. With the OCR on hold at least until Q1 next year, but a mild tightening bias in place, we see merit in fixing for up to 2 years. Fixing for longer is now less prohibitive given cuts in 4-5 year rates in recent months, but breakeven analysis shows that fairly hefty rises in interest rates are required for fixing for longer terms such as 5 years to be worthwhile.

 

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