Keep floating?

EL asks:
(updated on Wednesday, December 05th 2012)

Currently it seems the OCR is not likely to go down, I'm at a special rate of 5.25% floating for my three properties (two investments). Should I fix it or wait for another six months. My two investments are interest only with 100% loan on LTC. 

Our Experts Answer:

If I understand correctly, you have your own home and all securing your two investment properties all with the same bank. Note that while it is easy to look at the carded rates that are being offered (the rates quoted directly off the bank website or off sites like mortgagerates.co.nz) to do a fair comparison on whether it is best to fix or float you need to have a good idea on what the discounted fixed rate options are while also looking at what may happen with rates in the short to medium term.  The continuing Eurozone issues may push the swap rates lower again meaning that you may yet potentially have a chance of getting a cheaper fixed rate and in the meantime waiting on a floating rate of 5.25% is a good place to be. If you do want certainty however the fixed rates are still a long way below their 10 year average so you are unlikely to lose too much by locking in now if you decide to opt for safety.

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50