Budget for floating rates to rise 3%
In the first weekly overview of 2012 he says the markets are of the opinion that a tightening could come as early as March but ASB's expectation remains that the first tightening will come mid-year.
He says this means that floating rate borrowers should long have been budgeting for their floating rate costs to rise about 3% or so from mid-2010 to the end of 2011.
Alexander says if he were a borrower he would float and use the cash flow benefit to get the principal down on his mortgage as much as possible before the floating rate kicks up.
"I am near 100% certain nothing will push me to fix three years or beyond over the next two to three years and fixing two years is also very unlikely given the rate jump from floating that would involve."
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
