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Mad Scientist
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# 175147 19-Jun-2015 08:42
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In case people didn't know a couple of banks have declared war by reducing interest rate to the lowest they've done for centuries. 4.99 for two years.

To the harbingers of doom of housing crash, Nature have said wait longer. I've never fixed mine more than two years, and this is why. Interest rates will always be low thanks to your friend Fonterra.




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  # 1327620 19-Jun-2015 08:43
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Addendum

I don't think it'll go lower than this so no point waiting If you are thinking.

If you don't want to take too much risk only fix some of your loan not the whole thing




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  # 1327621 19-Jun-2015 08:44
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Wrong forum, but good to hear interest rates will never rise again.

Edit: Forum moved, cheers Mods.

 
 
 
 




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  # 1327625 19-Jun-2015 08:49
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Not until our biggest export gets strong returns. Could be this year ...




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  # 1327640 19-Jun-2015 09:10
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I fixed with Kiwibank for 2 years and 3 years back in November at 5.75 and 5.99 respectively.

Wondering if I should approach them and say giz a better deal - but I'm guessing they'll want some break fees if I do :(



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  # 1327641 19-Jun-2015 09:13
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I think this won't apply to you. Break fees could be very high. With a try though. Some tissues and sob story sometimes helps.




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  # 1327645 19-Jun-2015 09:20
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Jeeves: I fixed with Kiwibank for 2 years and 3 years back in November at 5.75 and 5.99 respectively.

Wondering if I should approach them and say giz a better deal - but I'm guessing they'll want some break fees if I do :(


Absolutely call and talk it through.  Or be prepared to move to another bank that will work with you.

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  # 1327646 19-Jun-2015 09:25
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Jeeves: I fixed with Kiwibank for 2 years and 3 years back in November at 5.75 and 5.99 respectively.

Wondering if I should approach them and say giz a better deal - but I'm guessing they'll want some break fees if I do :(


Even if there's a break fee it may be worth calculating what you'll save long term compared to the fee...? 

 
 
 
 


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  # 1327654 19-Jun-2015 09:32
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I managed to get 5% for two years a few days ago as the Bank I am with would match the 4.99 for 18months of others but not carry that rate to 2 years. No one was doing 2 years at 4.99 a few days ago unfortunately. Although .01% is probably not much to worry about in the scheme of things.

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  # 1327664 19-Jun-2015 09:46
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IMHO:
There is a possibility for further rate cuts this year as indicated by RBNZ and economists. 
If you have a large loan, I would suggest fixing half or a portion of your loan to 4.99 and the rest on the best possibly short term of 1 year or 6 months. 

We cannot really predict what it could be after 2 years - so by fixing some part of it on a shorter term will give you that flexibility. 

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  # 1327667 19-Jun-2015 09:49
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My guess is that we haven't seen the end of the cuts. There's little global demand for much of anything, inflation everywhere is low low low, and NZ growth forecasts are poor and getting worse. Milk is definitely getting cheaper next year as European quotas come off.




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  # 1327674 19-Jun-2015 09:58
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Hard to know. Usually the floAting rates correlate more with OCR. Fixed will do what fixed wants to do and is dependent on other things not OCR. Like offshore money lending rates etc




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  # 1327676 19-Jun-2015 10:00
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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)




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  # 1327678 19-Jun-2015 10:02
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We fixed ours at 5.99 for 5 years in Feb, with a small portion floating so that we can pay extra on that as able.

Slight regret, but perhaps not enough to try and get something better at this point!?




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  # 1327681 19-Jun-2015 10:08
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1% may or may not be a lot depending on how much. No if you've fixed just relax :) although no harm asking what penalty there is to break.




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  # 1327688 19-Jun-2015 10:33
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1% on a 500,000 mortgage over 20 years is around $60k over the life of a mortgage.

But you've fixed for 2 years, who knows what the rates will do when they come up.

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

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