Latest mortgage wars

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bazzer

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#1327715 19-Jun-2015 10:48

wasabi2k: Banks will usually make the break fees prohibitive enough to not bother, but worth a try.

This is not true in my experience (with ASB). Their break fees (Early Repayment Adjustment) are essentially equal to the PV of the difference in interest payments between what you agreed to pay and what their current rates for the remaining term. You can't get any fairer than that.

You win if the shorter term rates are higher than the rate you fixed at (i.e. no ERA probably). You could also win based on any number of other interest rate movements.

Although I note that for loans documented on or after the 1st April 2015 they calculate it with respect to wholesale interest rates, so things might have changed there.

MileHighKiwi

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#1327724 19-Jun-2015 10:54

We fixed mid last year for 3 years at 5.85%.

There will always be better deals, no point beating yourself up that you might be able to get half a % off now. Obviously it's worth asking the bank for a better deal, but when we fixed last year we were comfortable at that rate*

*rushes to phone* lol...

linw

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#1327753 19-Jun-2015 11:25

joker97: When the banks drop fixed rates like that it means they found some cheap money somewhere ... Maybe Russia? (That's just a joke, i have no clue where)

I know where. From my interest returns on money deposited. Just dropped .25% form an already low level.

But nobody seems interested in the greater number of lenders (except the lenders!).

Batman

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#1327808 19-Jun-2015 12:25

If you have millions to deposit then yes. Otherwise ... The bulk is from offshore. But I'm no financier ... I only heard from an ex mortgage specialist

linw

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#1327843 19-Jun-2015 13:19

Yes, I know, but just wanted a tiny little bit of gratitude!!

Batman

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#1327854 19-Jun-2015 13:34

The ~~country~~ Aucklanders thank you!

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bradh310

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#1327877 19-Jun-2015 14:55

Hi There,

Great news - Can I ask where you saw this info as have had a quick look on a few of the banks websites and it shows a 4.99% for 12 months, but the listed rate still hovers around 5.5% or are these private rates?

Which bank offered the 4.99%?

Thanks in advance

maxeon

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#1327881 19-Jun-2015 15:13

bradh310: Hi There,

Great news - Can I ask where you saw this info as have had a quick look on a few of the banks websites and it shows a 4.99% for 12 months, but the listed rate still hovers around 5.5% or are these private rates?

Which bank offered the 4.99%?

Thanks in advance

Westpac Choices fixed 2 year special 4.99

http://www.westpac.co.nz/home-loans/interest-rates/

ANZ and other banks usually match it.

timmmay

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#1328048 19-Jun-2015 19:14

IMHO rates will go down, but not a lot more, maybe another .25 or 0.4. The rest of the world is still generally lower than NZ, if you could get a mortgage from the US or Japan you'd be laughing.

mattwnz

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#1328113 19-Jun-2015 21:54

I think it largely depends if milk prices rise or not. If not, the banks are picking 2-3 more rate drops this year. At .25 each time, that potentially could be .5-.75 drops, which I think the banks will pass most onto borrowers. Sure, the rest of the world has lower rates, but historically, NZs rates have never been so low, and the NZ economy is supposed to be better than those with lower rates. . It is also only going to push house prices up, as people will be able to afford to pay more, so more competition to push up prices. Not great for savers either, and many elderly who earn interest from their savings to top up their super may face cashflow problems. These rate drops do help exporters, and improves the amounts farmers get, as the NZ dollar is weakened by having lower interest rates. Is good also for tourism, as visitors have more buying power. Not good for NZers who are travelling though, nor people buying online from overseas. I have already seem a big drop in people buying from my amazon, as the NZ dollar has weakened.

Regs

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#1328522 20-Jun-2015 23:19

bazzer:
wasabi2k: Banks will usually make the break fees prohibitive enough to not bother, but worth a try.

This is not true in my experience (with ASB). Their break fees (Early Repayment Adjustment) are essentially equal to the PV of the difference in interest payments between what you agreed to pay and what their current rates for the remaining term. You can't get any fairer than that.

I broke rates a couple of times with ASB - they had reasonable ERA's. Conversely, several people I know who used ANZ, National, and Westpac, found that their banks charged incredibly high break fees so they toughed it out on higher rates.

I fixed for 5yr at 5.39 a few weeks back. I'm pretty happy with that..

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Niel

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#1328817 21-Jun-2015 20:14

Last Friday I broke all 8 facilities of my mortgage out of my fixed periods including a a 3 year fixed term that still had 2 years remaining. Managed to get zero breaking fee (on-the-day special offer so that I don't have time to shop around, which I was not anyway). I'm with Sovereign Insurance, which typically has 0.1% higher rates than ASB but my mortgage is my transaction account and also my savings account, so I getting the highest possible interest on cash and it is tax free as I'm just paying less interest on a loan instead of earning interest which gets taxed. I know other banks offer this as an option, but Sovereign offers this as standard.

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