New Zealand homeowners should fix their interest rates now if they want to avoid a looming increase.
• The US Federal Reserve has raised its interest rate by a quarter point, a move that happened earlier than some commentators had expected.
• International interest rates drive NZ’s long-term rates, which have already started to move up, w/ a median 5-yr rate of 5.87% & below 5% 1-yr rates.
• Meanwhile, NZ economists expect fixed rates to rise further between 1.5% & 2% in 2 years, w/c will be a significant squeeze on homeowners with huge debt.
• ASB chief economist advises borrowers looking for certainty to fix now because what’s on offer at the moment is likely to get a lot higher over time.
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