Floating-rate home-loan borrowers still have time to enjoy low rates before switching to fixed terms, BNZ chief economist Tony Alexander says.
With extra worries about world growth and recent New Zealand data coming in weaker than expected, there were further falls in wholesale borrowing costs this week for periods beyond two years.
The three-year swap rate eased to nearly 4.2% from 4.25% last week and 4.6% four weeks ago.
The five-year rate had eased to nearly 4.56% from 4.64% last week and 4.96% four weeks ago.
As borrower, Mr Alexander was slightly philosophical.
"You win some and you lose some.
Only four weeks after switching from saying I'd stay floating - and I had that view for many months - to saying I would take advantage of an unexpected fall in fixed rates to fix two to three years, those fixed rates have fallen again."
The gap between floating and fixed following the fixed rate falls and the extra 0.25% on floating rates made the jump easier now for those contemplating fixing, he said.
The BNZ total-money floating rate was now 6.09% and the two-year fixed rate was 6.85%, he said.
"The chances of the Reserve Bank pausing in its tightening cycle have definitely increased and that means one can probably stay floating for a while longer before hopping into fixed because those fixed rates could even fall a tad further in the near future."
As a term depositor, Mr Alexander would have most of his money on a short term but some of it placed on longer terms to pick up some extra yield.
