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783 posts

Ultimate Geek
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  Reply # 1353061 28-Jul-2015 08:38 Send private message

NonprayingMantis: Any update on this thread OP?  

News today is that BNZ have dropped their 2 year rate to 4.69%.

Good time to be re-fixing I think!

http://www.interest.co.nz/news/76743/its-drive-grow-its-home-loan-business-bnz-now-offers-two-very-low-rates-leading-market


yeah saw that, very interesting...i haven't signed my documents yet so def need to get it knocked down more...




2381 posts

Uber Geek
+1 received by user: 511


  Reply # 1353079 28-Jul-2015 08:53 Send private message

BinaryLimited:
NonprayingMantis: Any update on this thread OP?  

News today is that BNZ have dropped their 2 year rate to 4.69%.

Good time to be re-fixing I think!

http://www.interest.co.nz/news/76743/its-drive-grow-its-home-loan-business-bnz-now-offers-two-very-low-rates-leading-market


yeah saw that, very interesting...i haven't signed my documents yet so def need to get it knocked down more...


I'm going to wait and watch what shakes down over the next few weeks.

Massey University banking expert David Tripe said BNZ's new rate was "probably somewhere near where rates ought to be"."Rates haven't been coming down to the extent that they ought to as funding costs have fallen. "I've been saying for some time that there's some scope for fixed rates to come down, because they haven't come down as much as they might have." (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11487606)

One of our fixed mortgages' term expired last night, and we're going to leave it on floating for a while to see what happens, given there seems to be confidence that at least there will be a further 0.25 percentage point drop of the OCR at the next announcement in six weeks (3 Sept I believe), if not further movement due to the current flexibilty for a reduction as explained by David Tripe above. Our floating rate is 5.65%, so that's ok for a month or two to see what happens...

(edited for grammar/sense!)



4885 posts

Uber Geek
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Microsoft

  Reply # 1353081 28-Jul-2015 08:54 Send private message

banks want you to fix now as they know (or strongly suspect) rates are coming down even more

sub 4 by xmas or not long after?

2381 posts

Uber Geek
+1 received by user: 511


  Reply # 1353107 28-Jul-2015 09:03 Send private message

nathan: banks want you to fix now as they know (or strongly suspect) rates are coming down even more

sub 4 by xmas or not long after?


All the more reason to hold off, I reckon... The additional cost of interest for a month or two versus the gain over the period of the fixed term is worth it. I'd like to fix for a decent period of time, so would love to see some movement in those 3-5 year terms - whereas all the fuss and interest is in the 1-2 year terms. That said, historically 5.6% (current Kiwibank 5-year term) is not exactly a high interest rate, and gives an assurance of payments for a long time.

55 posts

Master Geek
+1 received by user: 1


  Reply # 1354036 29-Jul-2015 07:26 Send private message

Can anyone tell me if they have had any luck in negotiating a discount to a floating rate? I am looking to call Kiwibank and see if they will apply a 0.5% discount to whatever their floating rate is. I have seen one or two posts about Banks doing that but its not a common occurrence as most are trying to get discount to fixed rates. Has anyone actually had success on getting a deal like this?

914 posts

Ultimate Geek
+1 received by user: 55


  Reply # 1354040 29-Jul-2015 07:34 Send private message

My floating component will move to 5.5% with the recent 0.25% OCR cut last week (LVR <85%). With ANZ, have a banking team as part of Medical Assurance.

Jon

Edit: fixing my england.

559 posts

Ultimate Geek
+1 received by user: 105


  Reply # 1354042 29-Jul-2015 07:35 Send private message

Wyvern: Can anyone tell me if they have had any luck in negotiating a discount to a floating rate? I am looking to call Kiwibank and see if they will apply a 0.5% discount to whatever their floating rate is. I have seen one or two posts about Banks doing that but its not a common occurrence as most are trying to get discount to fixed rates. Has anyone actually had success on getting a deal like this?


From understanding very common, so much so that it is almost a given.

2381 posts

Uber Geek
+1 received by user: 511


  Reply # 1354052 29-Jul-2015 07:51 Send private message

blackjack17:
Wyvern: Can anyone tell me if they have had any luck in negotiating a discount to a floating rate? I am looking to call Kiwibank and see if they will apply a 0.5% discount to whatever their floating rate is. I have seen one or two posts about Banks doing that but its not a common occurrence as most are trying to get discount to fixed rates. Has anyone actually had success on getting a deal like this?


From understanding very common, so much so that it is almost a given.


I don't think it's quite a given, in the sense you will at least have to ask for it! My bank (Kiwibank) was going to quite happily move our mortgage to the standard floating rate until I reminded them of my union banking package which includes .5 off floating and .25 off fixed.

That's a common way to also access such discounts, eg unions, Govt employee package (Westpac?) etc. I was able to have my union one applied while I was already a Kiwibank customer, and it came with other advantages like 50% off annual credit card fees.

646 posts

Ultimate Geek
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  Reply # 1354056 29-Jul-2015 07:57 Send private message

I have been offered 0.15% off the floating rate.

559 posts

Ultimate Geek
+1 received by user: 105


  Reply # 1354064 29-Jul-2015 08:03 Send private message

minimoke: I have been offered 0.15% off the floating rate.


Have you tried a broker? we used one for our first mortgage and we learnt what banks would be willing to negotiate.  Can't hurt  

55 posts

Master Geek
+1 received by user: 1


  Reply # 1354083 29-Jul-2015 08:16 Send private message

Kiwibank doesn't allow brokers so gonna have to do it myself. Just want to get an idea of what is an achievable discount to a floating rate is. Perhaps 0.25% is more like what I'd end up with if I pushed them?

2381 posts

Uber Geek
+1 received by user: 511


  Reply # 1354092 29-Jul-2015 08:32 Send private message

Wyvern: Kiwibank doesn't allow brokers so gonna have to do it myself. Just want to get an idea of what is an achievable discount to a floating rate is. Perhaps 0.25% is more like what I'd end up with if I pushed them?


Well, as mentioned given I'm with Kiwibank and that my union package gives .5 off floating, why wouldn't you push for this? It's worth a go anyway.

In my discussions with them over the past few weeks they've said there's no flexibility on the long-term fixed rates, but clearly there's some movement possible on the shorter rates, and I'm assuming this will include the floating rate (which is apparently still relatively high relative to banks' costs).

646 posts

Ultimate Geek
+1 received by user: 90


  Reply # 1354112 29-Jul-2015 09:00 Send private message

blackjack17:
minimoke: I have been offered 0.15% off the floating rate.


Have you tried a broker? we used one for our first mortgage and we learnt what banks would be willing to negotiate.  Can't hurt  

it is what they have offered not what I have accepted.

I don't get stressed over a bit of a percent. I come from having paid 25% in the good old days.

I'd encourage people to remember that while 5% on a loan might look mighty attractive now economy's move in cycles. So the issue isn't about trying to screw another 0.25% from somewhere today. It's about saying can I afford 10% on my debt in 10 years time.

Another way of saving a few dollars is to reduce the level of debt.

6416 posts

Uber Geek
+1 received by user: 1555


  Reply # 1354115 29-Jul-2015 09:07 Send private message

minimoke:
blackjack17:
minimoke: I have been offered 0.15% off the floating rate.


Have you tried a broker? we used one for our first mortgage and we learnt what banks would be willing to negotiate.  Can't hurt  

it is what they have offered not what I have accepted.

I don't get stressed over a bit of a percent. I come from having paid 25% in the good old days.

I'd encourage people to remember that while 5% on a loan might look mighty attractive now economy's move in cycles. So the issue isn't about trying to screw another 0.25% from somewhere today. It's about saying can I afford 10% on my debt in 10 years time.

Another way of saving a few dollars is to reduce the level of debt.


true,  but one of the most effective ways to do that is to get a lower interest rate (but keep payments the same.)

on a $500k mortgage over 25 years, an interest rate of 5% vs 5.5% (but keeping payments the same) gets you around 2.5 years saved off the life of the mortgage, and means you end up paying around $80k less in total over that time. 

646 posts

Ultimate Geek
+1 received by user: 90


  Reply # 1354171 29-Jul-2015 10:00 Send private message

We can't predict interest rates one year out let alone 25 years so predicted savings over the long term are super speculative.

One thing i think is guaranteed is that we are in a short period of historic lows and in the medium term there is only one way for interest rates to go and that is up.

So the best way to save money over 25 years is to reduce debt now. $500,000 at 5% today will cost you $25,000. Or $475,000 will cost me $23,750 - an immediate $1,250 saving.

More importantly when rates go to 6% that $500,000 will cost you $30,000. Where's I'll be paying $28,500 a $1,500 saving.

But that's not the important issue. Can you afford $30,000 in a few years time. I fear not because many people are maxed out today which is why they are concerned about saving 0.25% from somewhere.

Add in the risk that property values stop increasing at current historic highs (in auckland and christchurch) and may start pegging back medium term your asset to debt ratios start to look real ugly.

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