shreyas:jonherries: We have just bought our second home and are about to finalise our mortgage.
Subscribe to the interest.co.nz/mortgage newsletter. Every morning, they send you the public retail mortgage rates for all the banks, along with some good articles.
Worth noting that Kiwibank has a special until Christmas for 6 months fixed at 4.85% which is pretty good.
Things I am taking into account with our mortgage:
world economic outlook and the impact on NZ - hard to determine whether it will get worse or better, so I assume not too much change either way (to me there appears to be some large downside risks due to technology, debt, the environment and politics.
changes in circumstances - do we want certainty in our payments and for how long, that certainty also means that you limit your ability to pay off more. Think jobs/salary/redundancy/kids/pets/inheritance etc.
hedging - as most people have mentioned they have split their loans into lots of parts, this limits the risk of being stung if the rates go up but also limits the benefits if they go down.
I would suggest that you do some reading about what influences mortgage rates and then make an informed decision.
For me at this point, we are probably going to put a decent chunk on the 4.85% with a plan to pay off as much as possible of the smaller chunk in the first 6 months using an offset type approach, as it generally takes that long to think about what you need to do to the house and get it organised/priced etc.
Oh and don't forget life insurance, set it at the level of your mortgage just in case.
Is it advisable to go with the same bank for life/mortgage insurance? I know some banks can pressure you to buy mortgage insurance from them.
FYI Kiwibank just quoted me a 35% price increase on my current insurance for less cover.
Needless to say I wont be changing.