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Fix mortgage rates now - Tower

Inflation is the "Gorilla in the room" increasingly making its presence felt, and as interest rates rise, now is the time to fix your mortgage rate, according to Tower Investments CEO Sam Stubbs.

Monday, April 11th 2011, 12:00AM 1 Comment

by The Landlord

"We made a big call on mortgage rates here. Fix mortgage rates in the long term because inflation is coming," he said.

Speaking at the company's quarterly media briefing Stubbs said, "We actually think for mortgage holders now people should be taking fixed term rate mortgages because ultimately if interest rates go up, as expensive as they look right now and as attractive as floating rates look now, the severity of these rate rises and the speed with which they would come on would potentially make five-year plus fixed mortgage rates look quite attractive right now."

He said Tower believed that while Governments and Central Banks had kept interest rates low to promote growth and jobs, debt pressures would soon have to be tackled by rising inflation.

"We think the majority of the western nations are going to chose to inflate their way out of debt problems, and that's going to be bad news for fixed interest investors and very good news for people who own houses with mortgages."

 "Inflation is the homeowner's best long term friend," he said.

Also in what is potentially good news for Auckland landlords Stubbs highlighted the fact that new home building work is falling short of the city's population growth.

"Auckland's population grows by a net 16,000 every year just from immigration, regardless of the natural growth from population, 16,000 immigrants in Auckland, that's 80% of immigrants in New Zealand. That means you have to have new dwellings to house these people and the actual supply of housing in Auckland is tight, because we see it in the rental market, there's not a lot of evidence of a lot of building going on," Stubbs said.

"Look around you, where are the cranes? They're not there."

« Momentum building in house market, according to ANZFree Investment Property Showcase Events: Auckland, Wellington and Christchurch »

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Comments from our readers

On 11 April 2011 at 4:46 pm Richard said:
It's actually the "Elephant" in the room, not the gorilla, and this story seems to only refer to Auckland. There are other rooms in NZ, and happily what happens in Auckland stays in Auckland.
There are cranes in other parts of NZ. When will the Auckland bubble burts and this particular gorilla disappear in the mist?
Commenting is closed

 

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

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