Peter Griffin Planwise Financial Services

That is the question. Most Kiwis have been enjoying low home loan interest rates for a while. So how should you handle your loan? Should you fix or float?

It's certainly a question plenty of homeowners are asking right now. And the best way to answer is to weigh up your priorities and choose the rate and term that's best for you.

Here are some things you may want to consider:

Why choose a fixed rate?

A fixed rate means you'll know exactly what your repayments will be over a fixed term. So whatever interest rates do, you'll be able to budget your repayments with certainty. You can even increase the amount you repay by up to $10,000 per annum without any penalties.

Why choose a floating rate?

Floating rates are more flexible than fixed, so if you want to make extra repayments you can. If it's likely you'll be making a lump sum payment then it's better to keep on a floating rate.

What can you afford?

Plan your budget. Think about the impact of rate increases. Look at your financial commitments and lifestyle costs if your regular repayments go up.

Interest rates are affected by things like house prices, retail spending, exports and business investment. Remember, there's no way to guarantee a perfect decision on home loan rates. But there are things to bear in mind when making the best decision for you.

Talk to us at Planwise if you are unsure about the structure of your mortgage.