This Image shows the general curve we have seen with interest rates over the last 2 years. Will this continue?
Well we have to consider what is happening across the globe and how this may effect what we will see in the future.
Just a little bit of background on what’s happening in the world, to help you decide what to do with regards to the rates:
In the last couple of days the G10 (a group of countries in the developed world – who all agree to lend money to one another) got together and agreed to look at cutting interest rates to keep the world economy stimulus going. Out of this, Australia and Malaysia both cut their rates by -0.25% and the US yesterday cut its rates by -0.50%.
Back here in little old NZ our next Official Cash Rate announcement is due to be announced on March 23rd, however there are expectations now that they may make an announcement before that date, but its very much a wait and see.
In terms of interest rates, we don’t have room to drop them much further, and they are already at historically low levels. Many people had started moving from 1 to 2/3 year fixed rates as there has been speculation that they may start going back up (especially with the resurgence in the Housing market) However, this is unlikely to happen now for some time, so I’m confident that rates will stay at their current levels or lower for some time to come.