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Topic # 154430 28-Oct-2014 07:12
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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?

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  Reply # 1163306 28-Oct-2014 09:12
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http://www.interest.co.nz/opinion/72537/bernard-hickey-looks-how-think-about-whether-fix-or-float-and-what-bank-economists-are 


V
ery hard question - mortgage/interest rates are very complicated and influenced by a lot of factors.

Things like the OCR, exchange rate, economic outlook etc.. 

interest.co.nz or a broker in general is a good place to start.

Are they going to get lower? Who knows! If it could be predicted with certainty I'd have paid a lot less over the years.

I feel really sorry for the people with 6-700k mortgages at 5.x% - if and when interest rates get back up around the 9%+ mark those payments are going to be crippling.

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  Reply # 1163307 28-Oct-2014 09:16
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Fall in the price of oil, lower spending, dollar is weaker towards the US which all leads to lower inflation which means they don't have to put the OCR up to stop people spending too much.

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  Reply # 1163310 28-Oct-2014 09:22
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Interest rates are a totally manufactured and mostly falsely manipulated means to control. Thats it, there is no real logic.




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  Reply # 1163321 28-Oct-2014 09:38
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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?




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  Reply # 1163327 28-Oct-2014 09:47
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Very tempted by BNZ's new 3 year 5.85% rate. Currently on a 5.75% deal which expires very soon, so we're looking to lock the new one in asap.


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  Reply # 1163338 28-Oct-2014 09:57
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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%!







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  Reply # 1163341 28-Oct-2014 09:59
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we won't see that here i'm afraid. the lowest in modern times was 4.99% 3 years about 4-5 yrs ago or so



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  Reply # 1163342 28-Oct-2014 10:00
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MileHighKiwi: Very tempted by BNZ's new 3 year 5.85% rate. Currently on a 5.75% deal which expires very soon, so we're looking to lock the new one in asap.



just realised 2 yrs is 5.75

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  Reply # 1163343 28-Oct-2014 10:02
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joker97: we won't see that here i'm afraid. the lowest in modern times was 4.99% 3 years about 4-5 yrs ago or so


No particular reason we could not see longer rates, tracker rates and all sorts here. There is  a bizarre fatalism about financial commentary in NZ!

Our mortgage market is very unsophisticated. Eventually one of the lenders may realise that they can get more customers by expanding what they offer.





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  Reply # 1163344 28-Oct-2014 10:02
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Google ZIRP and NIRP.
Sure these arn't mortgage rates we can purchase off the street, but part of a modern "interest rate apartheid".

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  Reply # 1163446 28-Oct-2014 12:03
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Dairyxox: Google ZIRP and NIRP.
Sure these arn't mortgage rates we can purchase off the street, but part of a modern "interest rate apartheid".


NZ seems to like high interest rates. (In Japan the rate for home loans is 0.49%...!)

Also if you look at NZ banks, the margin between what they borrow at and what they lend at is much greater than many comparable economies: I estimate our rates are at least 1% greater than they should be.





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  Reply # 1163447 28-Oct-2014 12:08
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MileHighKiwi: Very tempted by BNZ's new 3 year 5.85% rate. Currently on a 5.75% deal which expires very soon, so we're looking to lock the new one in asap.



Done.

Very happy with that for the next 3 years.

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  Reply # 1163448 28-Oct-2014 12:08
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Geektastic:
Dairyxox: Google ZIRP and NIRP.
Sure these arn't mortgage rates we can purchase off the street, but part of a modern "interest rate apartheid".


NZ seems to like high interest rates. (In Japan the rate for home loans is 0.49%...!)

Also if you look at NZ banks, the margin between what they borrow at and what they lend at is much greater than many comparable economies: I estimate our rates are at least 1% greater than they should be.


I agree, but we cant we do about it. They're the only buggers I trust willing to loan me hundreds of thousands of dollars.





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  Reply # 1163463 28-Oct-2014 12:15
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joker97:
MileHighKiwi: Very tempted by BNZ's new 3 year 5.85% rate. Currently on a 5.75% deal which expires very soon, so we're looking to lock the new one in asap.



just realised 2 yrs is 5.75


the words are you should be able to negotiate close to 5% 1 or 2 year from certain banks.

everyone else is dropping or keeping their interest low, the bank only needs to borrow locally up to a ratio, then they get cheaper money elsewhere.



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  Reply # 1163474 28-Oct-2014 12:25
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what do you mean negotiate close to 5% - you mean I talk to other banks/brokers?

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