ANZ says looking at the breakeven table, although floating is cheaper at the moment, its not cheaper by much and even a gradual series of rate rises by the Reserve Bank would see floating rates rise quickly enough to make fixing beneficial.
The question is, which fixed rate do you choose?
ANZ says at the moment the one-year break even in one-year's time is 6.93% which is about 48 basis points above the current one-year fixed rate (6.45%).
It says that isn't much, especially when you consider that the Reserve Bank is almost certain to lift the OCR by at least that amount, with at least two 25 basis point OCR rises over the next year.
"As such we think the two year rate of 6.69% offers better value."
To further understand how breakeven analysis works, click on this story.
