Housing Loan Experts Warn Against Locking in High Interest Rates

In the current market scenario where housing loan interest rates have dropped slightly, experts are cautioning against locking in long-term rates. Despite major banks, including ANZ, already lowering their interest rates to below 6%, some experts predict that the market expects rates to fall further to 5% or even lower levels. According to housing loan consultant Gareth Veale, floating rates or 6-month fixed rates may be more suitable in the short term, as future borrowing costs are expected to continue declining. He advises borrowers to be cautious and avoid locking in rates for longer periods. CoreLogic's chief economist Kelvin Davidson also emphasizes that while short-term rates may be higher, the potential for lower rates in the future makes it worthwhile to consider. With the Reserve Bank of New Zealand expected to cut interest rates later this year, homebuyers should remain patient and wait for more favorable housing loan conditions. Amidst this critical period, experts are urging homebuyers to remain calm and composed, refraining from making hasty decisions before the interest rate bottoms out.