Brian Berry - Financial Advisor
	Straight forward, quality financial advice - so you can get on with the fun stuff in life. Click to view Rothbury's website.

There has been good news on the home loan interest rate front. The Reserve Bank of Australia decided unexpectedly to leave their version of the Official Cash Rate (OCR) on hold, NZ's unemployment figures were worse than expected and some of the heat has appeared to go out of the housing market – wrapped into one, that took the pressure off the Reserve Bank here to start increasing the OCR.

Financial markets were previously pricing in an increase in the OCR in late April, but that pricing has now been pushed out to the 10th of June review date and there is no guarantee that it will happen then also. The immediate effect has been for wholesale/swap rates to fall quite dramatically especially for terms from two years and out.

Whether these falls will be sustainable and will feed through to retail rates is yet to be seen. We still have the ‘ogre' of offshore developments that tends to upset best laid plans and offshore financial markets are still fluctuating reasonably wildly at times depending on the tone of the most recent economic news. A classic example of this is how the problems in little old Greece are having a significant effect on world financial markets. Currently it appears that Greece may be bailed out and therefore markets are on the up, but if that does not pan out then markets are likely to fall again as it may be indicative of problems that may yet arise for other economies.

With the heat off rates at present and an unknown start date for rate hikes, the variable rate looks like a good option for a while yet unless you crave the certainty of a fixed rate. Regardless, if you are going to fix, you probably wouldn't fix beyond two years at present.