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  Reply # 1333564 29-Jun-2015 16:38 Send private message

mattwnz: With what is going on in Greece at the moment, and the run on banks, it is a bit of wake up call, as these things can have knock on affects. I think many NZer, especially  in Auckland , owe uncomfortably high amounts to banks for their over priced shacks. Banks are your fair weather friends.


As strange as it sounds, if NZ interest rates do fall further, it's indicative that we're in very deep crap indeed.
This will be an interesting week, not just what happens in Greece, but also the Chinese equity markets are not looking good (a couple of trillion $$ became toilet paper over the past few days - despite their overlords' attempts to prop it up).  If some contagion eventuates, then US/Europe can't do anything much at all to fix things.  It only took a few shonky mortgages falling over to trigger the GFC, and it won't take much for the Greater Fool Auckland real estate market to run out of fools.



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  Reply # 1333602 29-Jun-2015 17:48 Send private message

bazzer:
BinaryLimited: Ok seems like no one has a cheaper rate, that leads me to think everyone is paying market rate.....w h y !?!?

Probably because most people don't have the carrot of a $1m mortgage to negotiate with? It's very easy to negotiate with the banks when you're a "high-value" customer.


Thats def not it, banks get nervous with higher numbers.
What does make negotiation easy is the right mortgage broker who has contacted atleast 2 banks and play them off eachother...

Banks want business...a lower % is better than no business...

Nothing new...




 

 





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  Reply # 1333603 29-Jun-2015 17:49 Send private message

Fred99:
mattwnz: With what is going on in Greece at the moment, and the run on banks, it is a bit of wake up call, as these things can have knock on affects. I think many NZer, especially  in Auckland , owe uncomfortably high amounts to banks for their over priced shacks. Banks are your fair weather friends.


As strange as it sounds, if NZ interest rates do fall further, it's indicative that we're in very deep crap indeed.
This will be an interesting week, not just what happens in Greece, but also the Chinese equity markets are not looking good (a couple of trillion $$ became toilet paper over the past few days - despite their overlords' attempts to prop it up).  If some contagion eventuates, then US/Europe can't do anything much at all to fix things.  It only took a few shonky mortgages falling over to trigger the GFC, and it won't take much for the Greater Fool Auckland real estate market to run out of fools.


thanks to the euro...platinum is low... :)




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  Reply # 1333898 30-Jun-2015 09:34 Send private message

So Kiwibank (where I have my mortgage) has two years at 4.99%, three years at 5.39% and five years at 5.6%.

We have one of our three fixed mortgages coming due towards the end of next month (was at 5.3% for 3 years), and I'm tempted to fix it for that five-year term. With increasing the repayments as we plan to do, it'll be paid off only six months after that five year term expires, so even if rates have gone up we can no doubt pay the full remaining balance immediately upon the term ending (if we haven't done so earlier).

Any thoughts on whether fixing for five years in such a situation and at this time is a good idea? Are the long-term rates likely to drop at all should the OCR drop another 0.25 percentage points?

Also, Kiwibank have told me there's no room for negotitation on the five-year rate - does that sound accurate, or something they say to put people off asking?

Thanks in advance for any advice!

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  Reply # 1333901 30-Jun-2015 09:39 Send private message

BinaryLimited:
Fred99:
mattwnz: With what is going on in Greece at the moment, and the run on banks, it is a bit of wake up call, as these things can have knock on affects. I think many NZer, especially  in Auckland , owe uncomfortably high amounts to banks for their over priced shacks. Banks are your fair weather friends.


As strange as it sounds, if NZ interest rates do fall further, it's indicative that we're in very deep crap indeed.
This will be an interesting week, not just what happens in Greece, but also the Chinese equity markets are not looking good (a couple of trillion $$ became toilet paper over the past few days - despite their overlords' attempts to prop it up).  If some contagion eventuates, then US/Europe can't do anything much at all to fix things.  It only took a few shonky mortgages falling over to trigger the GFC, and it won't take much for the Greater Fool Auckland real estate market to run out of fools.


thanks to the euro...platinum is low... :)


A pessimist could be looking at that, and might be prone to observe that gold:platinum price equity correlates historically with deep recessionary cycles.





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  Reply # 1333909 30-Jun-2015 09:49 Send private message

jonathan18: So Kiwibank (where I have my mortgage) has two years at 4.99%, three years at 5.39% and five years at 5.6%.

We have one of our three fixed mortgages coming due towards the end of next month (was at 5.3% for 3 years), and I'm tempted to fix it for that five-year term. With increasing the repayments as we plan to do, it'll be paid off only six months after that five year term expires, so even if rates have gone up we can no doubt pay the full remaining balance immediately upon the term ending (if we haven't done so earlier).

Any thoughts on whether fixing for five years in such a situation and at this time is a good idea? Are the long-term rates likely to drop at all should the OCR drop another 0.25 percentage points?

Also, Kiwibank have told me there's no room for negotitation on the five-year rate - does that sound accurate, or something they say to put people off asking?

Thanks in advance for any advice!


Use a broker...they dont bite.
as for the 2yr or 5yr options, depends on the person really..
its abit hard to say and NO one knows whats going to happen in the future or can even predict it...else we'd all be multi billionaires...

The way i see it...5yr=safe...2yr=risk...the question is...do u play safe or not? :)

Hope that helps...

Forgot to add, break fee's are a b**** :)




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  Reply # 1333926 30-Jun-2015 10:14 Send private message

Seems to be not not much room for negotiation after the most recent drop in OCR.  For the 5yr rate from Kiwibank, I was offered 5.49% 60 Months from ASB, but much better 5.25% for 48 months. This was last week, $300k mortgage, >20% equity:

Floating  -.60pts  - 6mths    4.99%  - 12mths 4.95% -  18mths  4.99% -  24mths  4.99%  - 36mths  5.15%  - 48mths 5.25%  - 60mths 5.49 %

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  Reply # 1333934 30-Jun-2015 10:22 Send private message

If you are 5 1/2 years away from paying off the mortgage the interest portion of each payment will be quite small.

You get certainty by fixing for 5 years but the cost is a loss of flexibility.

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  Reply # 1333948 30-Jun-2015 10:41 Send private message

graemeh: If you are 5 1/2 years away from paying off the mortgage the interest portion of each payment will be quite small.


Yeah, we're raising our repayments on it by 50%, so given the rate isn't that much higher than it was previously fixed at basically all that's going on principal.

It also means the difference between the three and five year terms (5.39 versus 5.6) in regards to impact on time until repayment repayment amounted to a single repayment (ie, one additional fortnightly repayment on the five-year term).

TBH, unless I hear some sound advice to the contrary, I'm preferring the idea of the certainty of the five-year term, especially since we still have the ability to pay an additional 5% off the loan balance per year.

That said, based on the posting above I'm going to see whether they are able to match the five-year term or offer a four-year term at a similar or better rate to that offered by ASB - no harm in asking!

Re mortgage brokers - my understanding is Kiwibank doesn't deal through these, so this would entail shifting banks. I've only recently consolidated all our banking with Kiwibank (including credit and savings accounts), just for the ease of banking, and am generally happy with them as a bank, so am not that keen on moving banks. That said, in the past I was able to use just the threat of moving (having got a good offer from another bank) to get some excellent rates out of them last time, including good deals on breaking and re-fixing mortgages on far better terms.

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  Reply # 1333975 30-Jun-2015 10:55 Send private message

jonathan18:
graemeh: If you are 5 1/2 years away from paying off the mortgage the interest portion of each payment will be quite small.


Yeah, we're raising our repayments on it by 50%, so given the rate isn't that much higher than it was previously fixed at basically all that's going on principal.

It also means the difference between the three and five year terms (5.39 versus 5.6) in regards to impact on time until repayment repayment amounted to a single repayment (ie, one additional fortnightly repayment on the five-year term).

TBH, unless I hear some sound advice to the contrary, I'm preferring the idea of the certainty of the five-year term, especially since we still have the ability to pay an additional 5% off the loan balance per year.


I'd say the key question for you then is are you certain you can continue to pay the old loan payment plus 50%.  If there is any doubt then you are better off to not fix.

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  Reply # 1334027 30-Jun-2015 11:45 Send private message

things are heading down, and personally I wouldn't fix for 5 years, or certainly not fixing a huge chunk of it for 5 years

just my 2c

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  Reply # 1334059 30-Jun-2015 12:23 Send private message

We're talking about 27% of our mortage (excluding that in the form of revolving credit, which is balanced fully by savings) being fixed for five years, so not a huge proportion or sum; we have our mortgage divided into three fixed loans, so that we will not be severely hit by any huge increase in rates (similarly, I acknowledge we won't be able to make the most of any significant reduction, but we believe this is an acceptable compromise). The remaining loans come due in 2016 and 2017, so we have the ability to take advantage of any reduction in the meantime with those loans, hence why I feel five years is ok in this context.

The only problem I see is that now I have the build-a-home bug which if realised will probably more than double the mortgage!

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  Reply # 1352696 27-Jul-2015 16:39 Send private message

Any update on this thread OP?  

News today is that BNZ have dropped their 2 year rate to 4.69%.

Good time to be re-fixing I think!

http://www.interest.co.nz/news/76743/its-drive-grow-its-home-loan-business-bnz-now-offers-two-very-low-rates-leading-market

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  Reply # 1353059 28-Jul-2015 08:36 Send private message

Jeeves: I'm going to wait for the next OCR announcement then hit up my broker. Current on a 2 year fixed with Kiwibank with ~14 months left, and 3 year fixed with ~26 months left. Will be interesting to see if they try to hit me with break fees.


So yea, KB wanted $6k in break fees which would have negated the savings. boo.



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  Reply # 1353060 28-Jul-2015 08:37 Send private message

Jeeves:
Jeeves: I'm going to wait for the next OCR announcement then hit up my broker. Current on a 2 year fixed with Kiwibank with ~14 months left, and 3 year fixed with ~26 months left. Will be interesting to see if they try to hit me with break fees.


So yea, KB wanted $6k in break fees which would have negated the savings. boo.


Speak to your new bank and see if they will absorb those fee's for new business?




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