Global influences on interest rates
Over the last few weeks, Global financial markets have signalled clear signs of the uncertainties surrounding the volatility of economic data from key players in the world markets. The USA Presidential elections will certainly have some bearing on financial markets views on how this result may affect decisions, and whether the US Fed Reserve will be able to further increase interest rates. We also have continued pressures throughout European economies, the impact of Brexit, the uncertainty of economic performance in China, including the emerging economies of India and South America, and various conflicts.
What this means in New Zealand
New Zealand, despite inflation running below the Reserve Bank target benchmark, but presenting strong GDP growth, and an economy that in the main, appears to be performing well, has its own issues with housing prices continuing upward trends, and an exchange rate that remains higher than is desirable for our predominant export reliance. The Reserve Bank is due to announce another Monetary Policy Statement on November 10, just following the USA election results, so it will be interesting to see where the Reserve Bank see our economy tracking, and predictions on any OCR announcement also due at that time are likely to be influenced by the outcome of the USA elections.
Some commentators have suggested that we have reached the bottom of our current interest rate cycle, but the big question now is, for how much longer can borrowers enjoy interest rates at current levels, and what is in store for investors? Last week one of the main banks raised their long term fixed rates and this was widely reported by the media as an indication that things were changing. All this particular bank did was bring its own rates more into line with its competitors, so it was nowhere near as dramatic as reported. Yes, there could be change in the wind and rates will inevitably go up at some stage but it is no cause to panic. It is wise for clients to understand their position and be ready to decide when the time comes.
How Rothbury can help
The Rothbury team is available to offer you an obligation free opportunity to discuss your home lending needs, whether you are a Vendor or Buyer. We understand the lending terms and conditions of the lenders and can tailor your loan to ensure that you receive the best possible deal. Please feel free to contact us any time for a discussion regarding your specific mortgage needs.
About the AuthorName: Jon O’Connor
Jon is the General Manager of Rothbury Life & Morgages, a nationwide life insurance and mortgage advisory operation for Rothbury Insurance Brokers
Jon is the General Manager of Rothbury Life & Morgages, a nationwide life insurance and mortgage advisory operation for Rothbury Insurance BrokersClose