Mortgage interest rates

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Niel

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#1310016 22-May-2015 17:12

The current fight for customers is before the next OCR announcement, anticipating it will drop. If it drops, then I'd think there might be more room for negotiation as the banks will have surety. If the OCR does not drop, then nothing changes and you should be able to get the same rate.

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Niel

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#1310017 22-May-2015 17:15

n4: If you're in the market for a new mortgage you should be checking this site out on a weekly basis - www.interest.co.nz

Keep in mind some (like Sovereign) gives a discount for higher value mortgages and some (good) brokers also get a discount for all their customers. That web site however is a good starting point.

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#1310018 22-May-2015 17:19

Niel: The current fight for customers is before the next OCR announcement, anticipating it will drop. If it drops, then I'd think there might be more room for negotiation as the banks will have surety. If the OCR does not drop, then nothing changes and you should be able to get the same rate.

I don't know why they believe it is going to drop. Do they have some form of inside knowledge, as it isn't information that has been disclosed? Infac the last time it was changed, I belvie it was going up. Inflation numbers are apparently quite low which would allow for them to lower it, but in real life, prices are going up a lot, eg rent, fuel, insurance costs, power etc. Milk prices maybe part of the reason, but that is one of the problems basing much of our economy on a single commodity. The way I see it, lowering rates is mainly only going fuel house prices more, as they are already all at record levels (interest rates are historically low, and houses prices in Auck are historically high). It means that people will be able to afford to borrow more, in order to outbid others buying a timber shack.

mattwnz

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#1310020 22-May-2015 17:21

Niel:
n4: If you're in the market for a new mortgage you should be checking this site out on a weekly basis - www.interest.co.nz

Keep in mind some (like Sovereign) gives a discount for higher value mortgages and some (good) brokers also get a discount for all their customers. That web site however is a good starting point.

You would think negotiating with the bank directly should yield a better rate, as a broker is a middle man who also gets a margin. So there must be quite a big margin for the banks on the published rates.

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#1310034 22-May-2015 17:52

Sounddude: I have 1 year left on a 2 year mortgage. Anyone broken a term before? how much did it sting?

Interested to know if I would save money by breaking and resigning on a much lower rate.

depends on how much you fixed and the difference between your fixed rate and the current fixed rate

n4

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#1310053 22-May-2015 18:16

Niel:
n4: If you're in the market for a new mortgage you should be checking this site out on a weekly basis - www.interest.co.nz

Keep in mind some (like Sovereign) gives a discount for higher value mortgages and some (good) brokers also get a discount for all their customers. That web site however is a good starting point.

Agreed - those are all published rates. Better rates are available from just about anyone by negotiation, or in the face of competition. Brokers are probably only worth while if you aren't comfortable negotiating or shopping around.

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Niel

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#1310056 22-May-2015 18:19

mattwnz:
Niel:
n4: If you're in the market for a new mortgage you should be checking this site out on a weekly basis - www.interest.co.nz

Keep in mind some (like Sovereign) gives a discount for higher value mortgages and some (good) brokers also get a discount for all their customers. That web site however is a good starting point.

You would think negotiating with the bank directly should yield a better rate, as a broker is a middle man who also gets a margin. So there must be quite a big margin for the banks on the published rates.

Depends. For example Sovereign does not have branches so they don't have staff to negotiate with and so you go through a broker who also sells insurance and gets you a package deal. If you have a simple situation then you are fine with dealing direct with a bank.

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mattwnz

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#1310057 22-May-2015 18:20

n4:
Niel:
n4: If you're in the market for a new mortgage you should be checking this site out on a weekly basis - www.interest.co.nz

Keep in mind some (like Sovereign) gives a discount for higher value mortgages and some (good) brokers also get a discount for all their customers. That web site however is a good starting point.

Agreed - those are all published rates. Better rates are available from just about anyone by negotiation, or in the face of competition. Brokers are probably only worth while if you aren't comfortable negotiating or shopping around.

Playing one bank against the other is the easiest way to negotiate. I am sure there will youtube videos on how to negioate on mortage rates with a bank. Banks are all selling the same product (credit) so the only difference is price. Cusomer service etc, is really irrelevant, as at the end of the day it is how much you can save, as that is more money in your pocket..

Amosnz

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#1311113 25-May-2015 10:42

I fixed at 5.89% for 10 years about a month ago. In the short term rates will be available at lower rates, but I'm playing the long game and hoping it'll pay off in years 5-10.

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#1311115 25-May-2015 10:45

Amosnz: I fixed at 5.89% for 10 years about a month ago. In the short term rates will be available at lower rates, but I'm playing the long game and hoping it'll pay off in years 5-10.

Wow nicely done! I've not heard of anyone in NZ fixing for that long and I'm pretty confident you'll be on a long term win with that deal.

I used to support a Mortgage Broking company and they had some interesting stats. One that I remember is that (5 years ago) the average mortgage life was 7.something years (due to buying/selling/refinancing).

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Amosnz

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#1311139 25-May-2015 11:00

TSB Bank are the only ones doing 10 year terms. Apparently they managed to secure a certain amount of capital at a good rate for 10 years so started offering it (and realizing the bigger banks wouldn't be able to follow suit as their capital requirements would be so much larger).
Interesting, we're still planning to be in this house in 10 years time (school zones etc), but the mortgage is transferable to a new property if required.

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lissie

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#1311678 25-May-2015 22:08

The best ever advice I was ever given on mortgages was to cover your bets. I split my loans into approximate 5ths 1 each of floating/1yr/2yr/3yr/4yr/5yr - that way you smooth out the risk. It was a great position to be in when rates went to over 8% after 2008.

That said the flexi rates are so out of wack at the moment - I just shoved a whole lot on 6months because I couldn't not.

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#1312395 27-May-2015 02:45

lissie: The best ever advice I was ever given on mortgages was to cover your bets. I split my loans into approximate 5ths 1 each of floating/1yr/2yr/3yr/4yr/5yr - that way you smooth out the risk. It was a great position to be in when rates went to over 8% after 2008.

That said the flexi rates are so out of wack at the moment - I just shoved a whole lot on 6months because I couldn't not.

when the rates went over 8% then, I got ASB to break the rate and re-fixed on a much lower rate (~6.5 I think). The break fees at the time at ASB were reasonable, and made it worthwhile. The break fees at the time at Westpac (worst) and ANZ/National were high enough that you would lose money by breaking and re-fixing.

the rates I was given were 5.15 at the bottom end (6-24 months) and 5.39 at the top end (60 months). They were valid till 25th - I forgot about it and now need to go get another quote :-)

as above, the 5.39 rate seems attractive over the long term. I cant see it dropping much further, but if it does i'll still be happy cause the rates are comparatively low compared to the last 10-15 years..

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