Mortgage interest rates tumbles

Forums › Off topic › Mortgage interest rates tumbles - anyone explain

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397 posts

Ultimate Geek

#1163501 28-Oct-2014 12:46

joker97: what do you mean negotiate close to 5% - you mean I talk to other banks/brokers?

talk to banks, ask staff to check with their managers, be prepared to walk away.

never accept the carded rate, even "special" ones.

Batman

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#1163633 28-Oct-2014 15:27

haha i think they'll just say we can give you a 0.1% discount and no other banks are lower. getting from 5.75 to 5 is ... umm ... never heard of it! (esp when everyone else is in the 6s

BTR

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#1163640 28-Oct-2014 15:31

Geektastic:
joker97: With all these palava with rising interest rates and people can't service their mortgages now the interest rate for 2 & 3 year fixed is super low. (5.85 3 yrs, 5.75 2 years)

is it due to a "fall in" some international money selling/lending/ thing??

is it going to get lower?

I'd hardly describe that as 'super low'. My brother in the USA has a 25 year fixed rate at 3.45%!

Mentioning your brother in the US isn't comparing Apples with Apple, their banks are different and their economy isn't that flash not to mention you can buy a house in Detroit for around $5K!

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#1163642 28-Oct-2014 15:33

BTR:
Geektastic:
joker97: With all these palava with rising interest rates and people can't service their mortgages now the interest rate for 2 & 3 year fixed is super low. (5.85 3 yrs, 5.75 2 years)

is it due to a "fall in" some international money selling/lending/ thing??

is it going to get lower?

I'd hardly describe that as 'super low'. My brother in the USA has a 25 year fixed rate at 3.45%!

Mentioning your brother in the US isn't comparing Apples with Apple, their banks are different and their economy isn't that flash not to mention you can buy a house in Detroit for around $5K!

umm someone was selling their house for an iphone 6

hangon

397 posts

Ultimate Geek

#1163648 28-Oct-2014 15:38

joker97: haha i think they'll just say we can give you a 0.1% discount and no other banks are lower. getting from 5.75 to 5 is ... umm ... never heard of it! (esp when everyone else is in the 6s

all major banks have 2 yr carded on 5.75% now

one could generally get 50 to 75 points discount off carded rate with negotiation if prepared to walk off.

0.1% would be an insult.

Jeeves

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Ultimate Geek

#1163679 28-Oct-2014 16:02

Hmm this is all very convenient as we're playing the market for our mortgage at the moment. Just on Friday, kiwibank gave me a letter of offer, part of which included 2 years @ 5.80%.... me thinks it'll be going back to them with a "please try harder" note...

hangon

397 posts

Ultimate Geek

#1163685 28-Oct-2014 16:09

Jeeves: Hmm this is all very convenient as we're playing the market for our mortgage at the moment. Just on Friday, kiwibank gave me a letter of offer, part of which included 2 years @ 5.80%.... me thinks it'll be going back to them with a "please try harder" note...

do try and let us know.

several banks offering cash incentives to new customers equivalent of at least 50 to 100 points of rate discount on a 300k loan (edit: on the first year)

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#1163690 28-Oct-2014 16:11

From memory, the best I've done from ASB is 0.5% discount. They seem to apply it automatically whenever I need to refix. It's not always that, it varies a bit depending on the term.

sidders80

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#1163720 28-Oct-2014 16:41

hangon:
joker97: haha i think they'll just say we can give you a 0.1% discount and no other banks are lower. getting from 5.75 to 5 is ... umm ... never heard of it! (esp when everyone else is in the 6s

all major banks have 2 yr carded on 5.75% now

one could generally get 50 to 75 points discount off carded rate with negotiation if prepared to walk off.

0.1% would be an insult.

I work for a bank and I can tell you that sort of discount is NOT going to happen. The current rate for 2 years is 6.39% with 5.75% as a special to lure new customers who have 20% equity so the banks can improve their under 80% book to lend to more customers over 80%. Those days of 5% are well and truly gone. They were there but not now.

if it is a floating rate its a different story.

Sid

hangon

397 posts

Ultimate Geek

#1163815 28-Oct-2014 17:35

sidders80:
hangon:
joker97: haha i think they'll just say we can give you a 0.1% discount and no other banks are lower. getting from 5.75 to 5 is ... umm ... never heard of it! (esp when everyone else is in the 6s

all major banks have 2 yr carded on 5.75% now

one could generally get 50 to 75 points discount off carded rate with negotiation if prepared to walk off.

0.1% would be an insult.

I work for a bank and I can tell you that sort of discount is NOT going to happen. The current rate for 2 years is 6.39% with 5.75% as a special to lure new customers who have 20% equity so the banks can improve their under 80% book to lend to more customers over 80%. Those days of 5% are well and truly gone. They were there but not now.

if it is a floating rate its a different story.

Please do tell us what sort of discount is going to happen. 25 points? 40 points?

It's not really a special when every bank is running it, is it. And if that sort of discount is not going to happen, I could just switch bank with whatever discount I can get, and the cash incentives is equivalent of another 50 to 100 point discount on a 300k loan in the first year.

sidders80

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#1163835 28-Oct-2014 18:10

hangon:
sidders80:
hangon:
joker97: haha i think they'll just say we can give you a 0.1% discount and no other banks are lower. getting from 5.75 to 5 is ... umm ... never heard of it! (esp when everyone else is in the 6s

all major banks have 2 yr carded on 5.75% now

one could generally get 50 to 75 points discount off carded rate with negotiation if prepared to walk off.

0.1% would be an insult.

I work for a bank and I can tell you that sort of discount is NOT going to happen. The current rate for 2 years is 6.39% with 5.75% as a special to lure new customers who have 20% equity so the banks can improve their under 80% book to lend to more customers over 80%. Those days of 5% are well and truly gone. They were there but not now.

if it is a floating rate its a different story.

Please do tell us what sort of discount is going to happen. 25 points? 40 points?

It's not really a special when every bank is running it, is it. And if that sort of discount is not going to happen, I could just switch bank with whatever discount I can get, and the cash incentives is equivalent of another 50 to 100 point discount on a 300k loan in the first year.

Every loan is different and whilst it is not something I can say on a forum I am happy to discuss it further with you. I am happy to call you tomorrow and discuss it further if you want to PM me your details.

Sid

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#1163841 28-Oct-2014 18:16

joker97:
BTR:
Geektastic:
joker97: With all these palava with rising interest rates and people can't service their mortgages now the interest rate for 2 & 3 year fixed is super low. (5.85 3 yrs, 5.75 2 years)

is it due to a "fall in" some international money selling/lending/ thing??

is it going to get lower?

I'd hardly describe that as 'super low'. My brother in the USA has a 25 year fixed rate at 3.45%!

Mentioning your brother in the US isn't comparing Apples with Apple, their banks are different and their economy isn't that flash not to mention you can buy a house in Detroit for around $5K!

umm someone was selling their house for an iphone 6

Yes well he lives in La Jolla in California where you can't buy a garden shed for $5k!

The point is that you have been able to fix there for the life of the loan for a long long time (many decades) - it's nothing to do with how their economy is now. They also allow mortgage costs and property maintenance as a tax deduction.

This is because they want to encourage home ownership.

There is no reason I can see why NZ could not have 10 year fixed rates - or even 25 year fixed rates. It's just too out of the box for the unimaginative lenders we have.

hangon

397 posts

Ultimate Geek

#1163863 28-Oct-2014 18:43

sidders80:
Every loan is different and whilst it is not something I can say on a forum I am happy to discuss it further with you. I am happy to call you tomorrow and discuss it further if you want to PM me your details.

thanks for that offer, I might when my fixed is matured.

nothing personal - let's just say the bank is not making this easy for average Joe, and the banks are making a lot of profit.

many people would just take the carded rate, there are a few reports on people negotiating with bank, and nowadays they just push a "special" rate out and try to shut down the negotiations.

JimmyH

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#1163957 28-Oct-2014 20:56

Paul1977: And all the drops seem to be targeted at new customers to get them to lock in. Why hasn't the floating rate dropped, surely that is the one that should respond fastest to changing economic conditions?

Not necessarily. Rates are priced off what banks can get the money for, and whether floating rates are higher or lower than fixed ones depends on the shape of the yield curve. If the yield curve is inverted, floating rates will typically be higher than longer duration fixed ones.

Batman

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#1163960 28-Oct-2014 21:00

Depends on where they can get cheap money, they can pass on if they wish.

What I want to know is who is giving out cheap money and is it going to get cheaper.

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