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And I know it causes serious angst for some people.
I know that because it’s the No 1 work related question I cop at barbecues.
Economists and other financial journalists tell me they get the same thing.
The mortgage rate question runs a close second to: What is going to happen to the dollar and (lately) should I buy some bitcoin?
I’m very confident I can’t pick currency. It was traditionally considered the most volatile and difficult of markets – until bitcoin came along at least.
And the reason I now enjoy pondering rates is I’ve realised I don’t have any special insight into how long I should fix my mortgage either.
I read everything I can about US Federal Reserve decisions, global inflation, markets and financial risk.
I get to chat with the Reserve Bank Governor, senior economists, fund managers and various other people much more expert than me in these fields.
And the thing I’ve learned from all this information is it doesn’t give you powers to predict the future.
Once you let go of the idea that your mortgage rate call is about you beating the system it gets a lot less stressful.
Are rates going up? Definitely, in theory. In reality, only probably.
I’m certainly very comfortable with reporting, as I did this week, the orthodox view that rates will rise over the next year or two.
The logic is sound.
Rates have already started moving up in wholesale markets and it makes sense that will flow through to retail rates.
That’s the most probable scenario and one that should be guiding people when they think about their finances right now.
But as likely as rate rises now seem I can’t forget the two or three false starts we’ve already seen since the GFC.
One of them caught out our Reserve Bank in 2014 – it started a cycle of hikes that had to be reversed.
Since 2009 I’ve twice fixed my mortgage at a higher rate long-term than I needed to – because everything I read said they would go up.
So I’m wary of the conventional wisdom, even if it looks more likely than ever this time.
The US Fed has hiked rates six times since late 2015 and New Zealand mortgage rates still remain stuck at historic lows.
Something has to give eventually, you’d think.
Regardless, I have some faith rates won’t rise too high in a hurry simply because the global economy is so loaded with debt it can not handle a return to pre-GFC highs.
Also we’re not facing the same kind of inflationary pressures that drove rates then (and even more dramatically in the 1980s).
But things change. And change has a habit of not turning up on time, then arriving at breakneck speed just when we’ve given up waiting.
I remain hopeful the world will manage an orderly return to moderate long-term interest rates. Central bank rates at, say, three per cent – mortgage rates between six and seven.
But there are risks on both sides of that scenario.
Markets could crash before we get there. Another global financial meltdown might cause central banks to slow or reverse the hiking cycle.
Or, perhaps more worryingly, inflation could turn on us and spike faster than expected – forcing central banks to raise rates quickly and higher than expected.
That would really hurt mortgage holders – and a global economy that now runs on debt.
An oil shock could do that – as it did in the 1970s. Or maybe something else. It’s very hard to imagine, because inflation has been down so long some are saying it’s dead.
That’s what worries me, the kind of firm belief that something is no longer a problem makes us vulnerable.
So my best barbecue advice is, sadly, pretty boring. It’s not designed to help you beat the bank in a bet on which way the world economy turns. Fixing a rate shouldn’t be a game of skill or chance.
My advice is to make choices that ensure you sleep well at night.
Spread your risk. Think about your ability to meet – or even exceed – minimum payments now. Think about what your future earnings look like.
Imagine how your budget would look if rates rose by 1 per centage point, or two!
What would that cost you a week and could you survive it?
Float a bit and fix a bit. Or fix some long and some short. In the end, fixing a rate should be about buying yourself stability to make choices with money you don’t have sunk in that beloved family home.
And breathe easier.
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