Banks Compete on 18-Month Home Loan Rates
- * Gareth Kiernan (Infometrics chief forecaster) is discussing mortgage rate strategies.
- In essence, Kiernan believes a short-term, strategic approach to fixing rates is best, capitalizing on a predicted dip before rates climb again.
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Key Points:
* Gareth Kiernan (Infometrics chief forecaster) is discussing mortgage rate strategies. He’s offering advice on when and for how long homeowners shoudl fix their mortgage rates.
* Current Advice: He suggests taking a slightly higher one-year rate now, then fixing for two years in late 2024 (around April 2027) when rates are predicted too be around 5.1%.
* Rate Prediction: He anticipates rates will begin to rise again around October of this year.
* Comparison of Strategies:
* One-year now, then two-year fix: Estimated average rate of 4.59% over three years.
* Two 18-month fixes: Estimated average rate of 4.75%. He suggests the difference isn’t huge, but noticeable.
* Current Rate Environment: Mortgage rates have fallen from a peak of over 7%.
In essence, Kiernan believes a short-term, strategic approach to fixing rates is best, capitalizing on a predicted dip before rates climb again.