As expected, the reserve bank has lifted interest rates, by one quarter of one percent (0.25%) in November. This was passed on to all variable rate mortgages.

Hopefully we are now close to the top of this rate cycle. Most economic forecasters are predicting another 0.25% rise in February and maybe followed by another in May this year.

Hopefully this would see the height of the cycle and rates would then steady out and even begin to fall late 2008 or early 2009. By most accounts this seems to be the scenario most forecasted.

This can be a time when many borrowers tend to panic and lock-in to fixed rates, while I am not saying don’t do this, I am saying be cautious and take all things into consideration before doing so.

For what it is worth, right or wrong, I am leaving my mortgage variable.

Remember, we are living in great times with low unemployment and a great economy so the future is bright.