Record low rates will one day end
Let’s have a look back at the year and what has happened in the area of interest rates, and where things are likely to go.
Have we all been wrong about interest rates remaining low?
Virtually everybody taking out a mortgage at the moment is fixing their interest rate for a one-year period. The trouble with this approach is that it can leave borrowers quite badly exposed when interest rates go up.
Low interest rates and high house prices
The commonly accepted view is that New Zealand house prices have soared 500% since 1992 because of insufficient construction. This is not true.
Why interest rates will remain low for a few years - Tony Alexander
Banks lend out about $280 billion to households for housing purchases. But they have funding from households exactly equal to $200 billion. It might pay to stop and think about that number for a moment.