[Moorf]

Food for thought: http://www.rbnz.govt.nz/speeches/2157629.html

So, basically the country looks in good shape in the long term. So what was the business analyst on One News last week waffling on about when he made the very scary statement along the lines of " if you can afford your current mortgage at 12% and take a drop in your property value of 20%, then you'll be fine.. if not, start taking a long hard look at your financial burdens". :(

Money-matters aren't really my thing, but I like to think I am "current". What do other forumites think is in store re interest rates? This is something we need to think about when renewing our mortgage - to fix or not to fix. We fixed ours in the UK about 7 yrs ago - and then the interest rates plummeted - and then we were charged £12.5k for the pleasure of redeeming it!! Don't really want to get into that scenario again. Thankfully our mortgage here will be tiny once my flat sale completes, but I'm still not sure whether to fix again or not......

[foolsgold99]

There is zero prospect of interests hitting 12%

Rates are at their peak and are going to fall from here

http://www.westpac.co.nz/olcontent/olcontent.nsf/content/FM_Weekly_20051107/$FILE/NZWC0711.pdf?Open

[Moorf]

Oh that's much better news than I expected :cheers

[foolsgold99]

The central bank is talking up the prospects of interest rate rises to try and cool the housing market. However it's all a bluff, they can't do it, becuase it would maintain a high value currency and adds costs to the key export sectors of the economy.

The money markets don't belive the central bank will do it, this is reflected in the bond rates. When you have a clash between a central bank and the markets, the markets always win. This was demonstrated in the UK in the 90's on "black wednesday".

[Moorf]

Ok, so what happens if the housing market doesn't cool?

[foolsgold99]

Then the market runs away at stupid prices for a couple of years before throwing a sad.

Think late 80's UK.

Not a good look.

[David with a dream]

Hi Moorf, I'd like to think along the same lines as Foolsgold. When in NZ July,Aug,Sept) I spoke at length with two financial people who are both of the opinion that intrest reates will remain the same or drop some time next year. They also suggested that now is a bad time to transfer money into NZ and to hang on for a year or three. So I took the advise and will have another go at the NZ thing in a year or three (Mrs.David With a Dream permitting)!

[katandbob]

This was demonstrated in the UK in the 90's on "black wednesday".
I certainly hope you dont see this it was a time i dont wish to repeat! :wah