 Interest rate predictions
The future of interest rates is a hot topic as economists and home owners try to predict what will happen to home loan rates.
While rates are low, home owners enjoy savings on their variable mortgages. But when rates go up, so will their repayments and the big question is 'how much'?
The Reserve Bank won't publicly promise to keep them low that would be dangerous and irresponsible. But in practical terms, it's in no hurry to raise rates; and absent bad inflation surprises, when it does raise them it will go gently.
It is expected that rates will remain as they are for some time, only rising slowly in early 2010. However, even small rate hikes can mean a significant increase in your monthly repayment amount.
Ironically, the better the news on the economy both here and in the US and China the quicker those rate hikes will come and the bigger they will be. Although rates are not going to go back to the high levels of early-2008 any time soon.
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