The numbers were stacking up for home owners with mortgages to start fixing for two years, BNZ chief economist Tony Alexander said.
"I would be inclined to fix for two years. However, my desire to do that is less this week than over the past three weeks, because of the deteriorating situation in Europe and the deepening La Nina weather pattern."
The deteriorating situation in Europe had the capacity to crimp global growth a bit further and push out yet again expectations of monetary policy tightening offshore, he said.
That meant the chances of decent rises in medium to long-term borrowing costs had decreased.
If things really did dry out during New Zealand's summer, the chances were strong the Reserve Bank would not raise the cash rate again in March, and as expectations moved in that direction again, there would be decreasing upward pressure on swap rates and probably some more downward pressure, just as there had been in the past week, Mr Alexander said.
"While the numbers stack up in favour of fixing for two years, it looks like sitting on floating is not too unsafe a thing to do at the moment unless you are a conservative borrower like me."
Most people were sitting on floating, he said. Reserve Bank data showed that at the end of October, 42.3% of mortgage volume was floating, the highest proportion since April 2000.
Mr Alexander urged those with funds to invest in bank term deposits to read the documentation closely to ensure they understood what they were getting into. There was very strong competition between banks for term deposit funds as efforts were made to reduce reliance upon foreign funding sources.
"The result is that the old relationship between the likes of bank bill yields and term deposit rates has been blown out the window and retail funds are now quite expensive.
"The challenge then for banks is how to minimise the cost of these funds while getting as much as possible. This is where you need to be cautious."
One bank had developed what, at first glance, looked like a high yielding call account, he said. However, a depositor had to give a month's notice before they could access the funds.
Another bank this week advertised in full page print a "lovely 6% rate" for six months.
There was just one problem, Mr Alexander said. Depositors had to let their funds sit with the bank at 4% and every now and then - it was not clear how often - they would offer the 6% rate.
"If you are quick enough you will be able to get it. That might mean texting back, phoning in or probably signing up on line."
If depositors were too slow, they missed the rate and had to leave their funds sitting there at the low 4% rate waiting for the next time the high rate door was opened," he said.
