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1373 posts

Uber Geek
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  Reply # 1331309 25-Jun-2015 12:31
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BinaryLimited: Scary.... " Mortgage rates peaked at 20.5% in June 1987."
http://www.rbnz.govt.nz/statistics/key_graphs/mortgage_rates/  


Frightening but warrants a little perspective.  Inflation was raging at about 14% if I recall.  I was receiving 11% interest on a normal savings account at one stage.





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Master Geek
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  Reply # 1331312 25-Jun-2015 12:37
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we are due to come off at the start of august, our mortgage broker has already indicated he will be able to secure at least $3k cash back

 
 
 
 




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Ultimate Geek
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  Reply # 1331331 25-Jun-2015 12:39
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bazzer:
simon14: I got 4.99% fixed for 2 years with ASB and i was already locked into a 3 year fixed rate of 5.65% with 2 and 1/2 years to go.

no break fee or anything, they just swapped me over.

Very happy with ASB.

Ditto. Also, contemplating switching a couple of 5.95% tranches for very reasonable ERA fees.

Rates can't drop much below 4.99%, can they?

I guess I should be pushing for 4.89% but I don't think the bank will feel that my business is worth buying. Worth giving it a go though.


Apparently its going down even more sometime soon... not sure of ETa tho...






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Ultimate Geek
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  Reply # 1331332 25-Jun-2015 12:40
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floydbloke:
BinaryLimited: Scary.... " Mortgage rates peaked at 20.5% in June 1987."
http://www.rbnz.govt.nz/statistics/key_graphs/mortgage_rates/  


Frightening but warrants a little perspective.  Inflation was raging at about 14% if I recall.  I was receiving 11% interest on a normal savings account at one stage.


Wow 11%, unheard of nowadays!




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  Reply # 1331336 25-Jun-2015 12:46
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BinaryLimited: Scary.... " Mortgage rates peaked at 20.5% in June 1987."
http://www.rbnz.govt.nz/statistics/key_graphs/mortgage_rates/


Yes.  I was living in Sydney at that time, peaked at 15% or so over there.  At that time, with 20% deposit, we could only borrow about 2x combined gross income. A couple of years later, the banks were begging us to borrow more - and with some very minor corrections between then and now, it's been a bubble ever since (IMHO).

These low interest rates are a double-edged sword. Need to consider that the high rates were in place to counter rampant inflation, which affected everything including house prices and wages.  If you could make the payments, then you soon ended up with higher equity, and a much lower ratio of debt to income, as your income went up, house value went up, but the principal dropped.  This happened fast with compounding 10-15% annual pay rises etc.
Not so these days, where inflation is low, wage rises are also low.  If you take out a large mortgage now, then it's probably still going to be a large mortgage relative to your income in 10 years time - unless you pay off a lot of principal.  House prices may continue to rise - but then again they might not - or worse.  

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Ultimate Geek
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  Reply # 1331378 25-Jun-2015 13:30
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Fixed at 4.99 for 5 years with SBS a month or so ago, down from late 5s with ANZ on part and 6.75 that was floating. 5 years is a long time to fix, but at under 5 is was a no brainer. Floating rates may have edged that low once or twice in the last few years but not for long.


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Master Geek
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  Reply # 1331379 25-Jun-2015 13:40
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Handsomedan: It all depends on who you talk to and whether they are prepared to push past their limits and seek approval for a lower rate/better deal. 

They don't like to make waves, generally speaking, unless they are getting good business. 


Exactly that, if the person you are dealing with is willing to help you they can get you a good deal. Earlier this year at ANZ I asked in person at the branch if I could get a higher term deposit rate, almost always able to vs fixed if you do it online. He said he could give me 0.1% but said he would check if he could get authorisation to give me 0.15% more instead. He called someone higher up the ladder in Auckland office, then rang me later saying it was all sorted. I was amazed and grateful at the effort he went to.

Sounds like you are already getting a very good deal compared to everyone else.

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  Reply # 1331380 25-Jun-2015 13:40
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BinaryLimited:
floydbloke:
BinaryLimited: Scary.... " Mortgage rates peaked at 20.5% in June 1987."
http://www.rbnz.govt.nz/statistics/key_graphs/mortgage_rates/  


Frightening but warrants a little perspective.  Inflation was raging at about 14% if I recall.  I was receiving 11% interest on a normal savings account at one stage.


Wow 11%, unheard of nowadays!


It is at the bank, but they must have also been making huge margins back then, if they were lending at 20%, but borrowing money at 11%. The amount of borrowing back then was also less, partly due to house prices being far less compared to wages. Also back in the 80's there were far more 1 person working families.

My parents got a small mortgage in the 80's and they said that back then banks were very conservative with lending, and the bank manager had to actually come out and look at the property first.  That would be unheard of these days, as banks seem to be far less risk adverse with lending, and it  is the depositors and investors that will take the haircut if the bank gets in trouble..

Prior to the GFC in 2007-08, you could get 11% in some of the finance companies, and I recall even banks were up to 8%. Now most are in the 3%range.

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  Reply # 1331381 25-Jun-2015 13:41
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Fred99:
BinaryLimited: Scary.... " Mortgage rates peaked at 20.5% in June 1987."
http://www.rbnz.govt.nz/statistics/key_graphs/mortgage_rates/


Yes.  I was living in Sydney at that time, peaked at 15% or so over there.  At that time, with 20% deposit, we could only borrow about 2x combined gross income. A couple of years later, the banks were begging us to borrow more - and with some very minor corrections between then and now, it's been a bubble ever since (IMHO).

 


There was a story on radio NZ a few days ago about some experts saying that Australia's housing boom is about to burst. If it does, then it is going to be felt hear too, considering most NZ banks are Australian owned.

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  Reply # 1331387 25-Jun-2015 13:51
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mattwnz:
Fred99:
BinaryLimited: Scary.... " Mortgage rates peaked at 20.5% in June 1987."
http://www.rbnz.govt.nz/statistics/key_graphs/mortgage_rates/


Yes.  I was living in Sydney at that time, peaked at 15% or so over there.  At that time, with 20% deposit, we could only borrow about 2x combined gross income. A couple of years later, the banks were begging us to borrow more - and with some very minor corrections between then and now, it's been a bubble ever since (IMHO).

 


There was a story on radio NZ a few days ago about some experts saying that Australia's housing boom is about to burst. If it does, then it is going to be felt hear too, considering most NZ banks are Australian owned.


That's OK, the NZ govt will continue to prop them up! Can't have them not continue to make record profits quarter-after-quarter-after-quarter!

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  Reply # 1331391 25-Jun-2015 14:02
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keewee01:
mattwnz:
Fred99:
BinaryLimited: Scary.... " Mortgage rates peaked at 20.5% in June 1987."
http://www.rbnz.govt.nz/statistics/key_graphs/mortgage_rates/


Yes.  I was living in Sydney at that time, peaked at 15% or so over there.  At that time, with 20% deposit, we could only borrow about 2x combined gross income. A couple of years later, the banks were begging us to borrow more - and with some very minor corrections between then and now, it's been a bubble ever since (IMHO).

 


There was a story on radio NZ a few days ago about some experts saying that Australia's housing boom is about to burst. If it does, then it is going to be felt hear too, considering most NZ banks are Australian owned.


That's OK, the NZ govt will continue to prop them up! Can't have them not continue to make record profits quarter-after-quarter-after-quarter!


They will, but under the new OBR rules (think that is what it is called) the people with saving in a bank will lose a percentage of their deposits first if a bank fails.
IMO the profits these banks are making, and CEOs are getting paid, is obscene, and is really hoovering up money from the NZ economy. 

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  Reply # 1331393 25-Jun-2015 14:06
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mattwnz:
keewee01:
mattwnz:
Fred99:
BinaryLimited: Scary.... " Mortgage rates peaked at 20.5% in June 1987."
http://www.rbnz.govt.nz/statistics/key_graphs/mortgage_rates/


Yes.  I was living in Sydney at that time, peaked at 15% or so over there.  At that time, with 20% deposit, we could only borrow about 2x combined gross income. A couple of years later, the banks were begging us to borrow more - and with some very minor corrections between then and now, it's been a bubble ever since (IMHO).

 


There was a story on radio NZ a few days ago about some experts saying that Australia's housing boom is about to burst. If it does, then it is going to be felt hear too, considering most NZ banks are Australian owned.


That's OK, the NZ govt will continue to prop them up! Can't have them not continue to make record profits quarter-after-quarter-after-quarter!


They will, but under the new OBR rules (think that is what it is called) the people with saving in a bank will lose a percentage of their deposits first if a bank fails.
IMO the profits these banks are making, and CEOs are getting paid, is obscene, and is really hoovering up money from the NZ economy. 


Could not agree with you more. It is getting rediculous

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Master Geek
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  Reply # 1331410 25-Jun-2015 14:38
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simon14: I got 4.99% fixed for 2 years with ASB and i was already locked into a 3 year fixed rate of 5.65% with 2 and 1/2 years to go.

no break fee or anything, they just swapped me over.

Very happy with ASB.


Can you elaborate how you accomplished this at all? I am in a similar position.  With ASB, 5.85%  fixed for another year and a bit.
How did you get them to swap your rate with no fees?

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  Reply # 1331414 25-Jun-2015 14:48
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3.4% fixed for 30 years.

My brother in California.





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  Reply # 1331418 25-Jun-2015 14:51
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Oldmanakbar:
simon14: I got 4.99% fixed for 2 years with ASB and i was already locked into a 3 year fixed rate of 5.65% with 2 and 1/2 years to go.

no break fee or anything, they just swapped me over.

Very happy with ASB.

Can you elaborate how you accomplished this at all? I am in a similar position.  With ASB, 5.85%  fixed for another year and a bit.
How did you get them to swap your rate with no fees?

It just happens. They have a formula they use to calculate the ERA, basically relates to your current rate and their (wholesale?) rate at the remaining term. So, as above, rate was 5.65 with 2.5 years to go, looking up current rates that's somewhere between 5.10%-5.75% retail rates. So it makes sense that there's no ERA.

For you, rate is 5.85% with 1 year remaining term. Considering that they have 1 year retail rates between 4.99%-5.49% then you will probably be up for ERA. The inputs to their formula is a mystery but you might be looking at an ERA of 0.5% of the principal (at a guess). You may be able to negotiate out of it, but that's (probably) not what simon14 did.

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