Mortgage rates have dropped again, so I'm considering my position. I'm 100% floating right now, considering whether to fix for six or twelve months, or of course I can float for a bit longer. Mortgage rates right now with ASB are here, but for ease of access and historical record
Floating 6.00% (but I get a small discount, because I asked)
6 months 4.85%
12 months 4.35%
24 months 4.49%
36 months 4.79%
5 years 5.09%
Fixing for six months gives a moderate saving, but the opportunity to get a lower rate again in six months. Fixing for 12 months give a saving 2.5X as much in my circumstances, with the minor risk of rates rising within 12 months, and another minor risk of opportunity cost of rates dropping a lot soon - unlikely in my opinion. By my calculation fixing six months now again in six months even at 4% doesn't save as much as fixing for 12 months now.
My uninformed opinion / gut feel is rates will fall or stay stable for at least six months, probably pretty stable for 1-2 years, but I'm not sure. It's clear that fixing for 12 months now is a good idea so long as rates aren't likely to rise significantly in the next 12 months.
Any thoughts / opinions?