Move to fix takes hold
The latest Reserve Bank statistics for May show that $91.2 billion of residential loans is on floating rates, and $93.3 billion is fixed.
But still by number, more loans are floating than fixed – 879,237 compared to 543,100.
Of the floating lending, $48.8 billion is fixed for less than a year, and $33.4 billion is fixed for one to two years.
But increasing amounts are being fixed for two to three years, $7.4 billion in May compared to $7.1 billion in April.
Mark Lister, of Craigs Investment Partners, said fixing was a good strategy for borrowers.
He said there was no urgency but borrowers had a growing sense that the next interest rate move would be up.
“People are seeing what’s happening around the world and forming the view that interest rates are not going to go much lower.”
He said two-year rates in the 5% range would look like a good option to a lot of borrowers.
There have been suggestions that once people start to fix their mortgages, a rush to fix could push rates higher.
But Lister said rates were more likely to be driven higher by improving conditions in the United States and signs of economic growth in New Zealand.
