If your fixed-rate mortgage is due to expire soon, it’s important to carefully consider your next steps in light of recent trends in interest rates. With rates currently on the decline, here’s what you need to know when deciding how to move forward.
Interest rate outlook
Interest rates in New Zealand have been decreasing in recent months. The Reserve Bank of New Zealand (RBNZ) recently lowered the official cash rate (OCR) as part of its efforts to support the economy. As a result, mortgage rates are following suit and have been falling. The RBNZ’s forecast indicates the OCR could continue to decline, and many economists expect rates to stay lower for the foreseeable future.
This trend presents an opportunity to potentially lock in a lower mortgage rate. If you’re considering fixing your mortgage, you may want to explore shorter-term fixed rates, as they could give you the flexibility to take advantage of future rate drops. Alternatively, if you prefer stability, locking in a longer-term fixed rate will offer peace of mind.
However, the right option depends on your unique financial situation and goals. Consulting with a mortgage adviser can help you assess your circumstances and ensure you make the most informed decision.
When does your fixed rate expire?
Knowing when your fixed-rate mortgage expires is important. Lenders generally notify borrowers 6-8 weeks before their fixed term ends, allowing you to lock in a new rate within that window. If you don’t take action, your mortgage will typically revert to a floating rate, which may be higher than the fixed-term rates available.
Consider your future plans
When choosing your mortgage strategy, think about your personal circumstances. Are you planning any major life changes, like moving house, buying an additional property, or starting a family? These changes could influence whether a short-term fixed rate or floating rate might better suit your needs, providing flexibility if you’re likely to adjust your mortgage needs soon.
Get professional mortgage advice
As interest rates fluctuate, it’s important to stay informed and make decisions that align with your long-term financial goals. Consulting with a mortgage adviser can help you determine the best strategy based on your personal situation and the latest rate trends.
If you’d like to discuss your options and plan for the future, don’t hesitate to get in touch. We’re here to help you navigate this process and ensure you make confident choices for your mortgage.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.