In the Weekly Overview he says low rates for the likes of the five year term appeared in 1998, 2003 and last year and his best guess on that sort of cycle is 2013.

"So until those low rates come along - after the economy has fallen into a new downturn for a while - I am only going to be thinking about floating at terms out to three years at the very longest.

He says the analysis at this stage says that for the bulk of borrowers looking at still paying off their debt in three years time, there is a slight advantage to taking the three year rate at 7.5% rather than riding the floating rate roller coaster.

"But personally I wouldn't because there is a risk the tightening cycle not only does not start on June 10, but that it is more stretched out than we are currently thinking."

Alexander says there is no evidence that currently low borrowing costs are encouraging borrowing and spending by either consumers or businesses. The currency is above average and likely to rise further and this will take some of the tightening strain. Plus the world still looks like a very risky place with potential for some downside growth surprises somewhere down the track. "And there remains lots of spare capacity in our economy and around the world on average," he says.

"Therefore I would be quite happy to stay floating for the moment working away at getting my debt down as quickly as possible."

BNZ's central view remains that the Reserve Bank will start taking away the 2.5% official cash rate they installed in April last year when the cash rate is reviewed on June 10.

However it says there is a clear risk the Reserve Bank may hold back a bit longer given that data received on the New Zealand economy in recent times has not been strong.