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96 posts

Master Geek
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  Reply # 1365618 13-Aug-2015 14:57
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nathan: sounds about right, I got 5K on a 500K loan


yeah 1k per 100k loaned seems to be the going rate 

200 posts

Master Geek
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  Reply # 1366504 14-Aug-2015 17:22
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Hey Guys,

Got two options here.
Stay with current bank(bnz) and get $3000 cash back and refix at 4.59 two years
Go to asb $4500 cash back and fix at 4.49 two years.

What are the usual lawyers fees for changing banks? Going to ASB I can get better terms and I like fastnet over bnz online banking.
Kiwi bank was $3500 cash back to change and 4.54
Havent tried any other banks

 
 
 
 


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Uber Geek
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  Reply # 1379603 4-Sep-2015 10:55
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4.35 BNZ 1 year fixed

1259 posts

Uber Geek
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  Reply # 1379633 4-Sep-2015 11:56
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Wow how'd you get it that low?
Did you get any of the cash back type offers other above have listed?

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  Reply # 1379642 4-Sep-2015 12:02
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No I didn't. It's all over the internet.

69 posts

Master Geek
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  Reply # 1379785 4-Sep-2015 14:30
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Is it possible to get one of those employer/industry discounts on that new BNZ 1 yr fixed rate?

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  Reply # 1379797 4-Sep-2015 14:41
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I'm considering breaking out of a fixed term contract at 6.3% which is due to run for another 18 months. Mortgage calculators say if we fix at 4.99% now we'd save a couple of grand. My guess is if we float it for a couple of months then fix we'd save any more.

Any thoughts? Right now the break fee isn't tooo bad (around one months mortgage payments), but the longer we leave it the higher it gets.




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Uber Geek
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  Reply # 1379804 4-Sep-2015 14:53
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Float and fix in a few months

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Uber Geek
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  Reply # 1379846 4-Sep-2015 15:40
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timmmay: I'm considering breaking out of a fixed term contract at 6.3% which is due to run for another 18 months. Mortgage calculators say if we fix at 4.99% now we'd save a couple of grand. My guess is if we float it for a couple of months then fix we'd save any more.

Any thoughts? Right now the break fee isn't tooo bad (around one months mortgage payments), but the longer we leave it the higher it gets.

Generally the break fee will be contingent on the current interest rate for the term remaining, so ideally you want to break before a drop rather than after. It's impossible to say "the longer we leave it the higher it gets" because no one knows what the yield curve will look like in the future. For the same reason, no one can say for certain if it's better to fix now or later. Obviously, with a normal yield curve, the longer you leave it the higher the difference in interest rates, but then the shorter the term.

Personally, I wouldn't think there's much to decide. If the break fee is less than what you'd save in interest then do it (assuming you don't have specific cashflow requirements, in which case you might have other criteria). That's the first step. For me, that wouldn't matter if it was a couple of grand different or a couple of dollars. It's easy to break so why not? Last time I did it (with ASB) their calculation seemed way off, because it was a complete no-brainer to break. They don't make mistakes, so there'll be a reason for it, but in that case I take it as a win-win.

So, then, do you float or fix? Obviously, if you float you don't get to take advantage of the lowest rates. How much lower are you hoping the fixed rates go that the margin you're paying on floating makes sense, especially in the short-term. That's up to you, I mean if you ended up paying 6.3% on your floating (as an example), you've just paid the break fee for the privilege of fixing whenever you want. Is that really worth it? Depends how low the rates go and how long you wait. There's no crystal ball here.

If you worry about the future, you're just speculating. That's fine, if that's what you're trying to do. Could go the other way, then what? I don't bother gambling with my mortgage, because no-one knows the future and the bank has more people dedicated to this problem than I do, so I just work in terms of what I know. Sure, the rates may drop in the future but probably (haha) not by as much as even what you're looking at (6.3% down to 5%). If you can save a couple of grand by refixing now, how much are you hoping to save by taking the chance and waiting?

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  Reply # 1379850 4-Sep-2015 15:44
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Well the immediate effect for me is we pay a months payments (which is no problem) just to switch from 6.4% to 6.35%, though I should get a discount off the advertised rate. The gain comes when we lock in a lower rate in a few months, and the gain is over a couple of years.

I think given the general trend is downward the sooner I break the less it costs, the more we save. We have a spreadsheet to calculate whether it's worthwhile a mortgage broker gave to my wife, it indicates at least $1K savings, but maybe $3K if rates go to where they're expected, taking into account the break fees.




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Uber Geek
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  Reply # 1379863 4-Sep-2015 15:57
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timmmay: Well the immediate effect for me is we pay a months payments (which is no problem) just to switch from 6.4% to 6.35%, though I should get a discount off the advertised rate. The gain comes when we lock in a lower rate in a few months, and the gain is over a couple of years.

I think given the general trend is downward the sooner I break the less it costs, the more we save. We have a spreadsheet to calculate whether it's worthwhile a mortgage broker gave to my wife, it indicates at least $1K savings, but maybe $3K if rates go to where they're expected, taking into account the break fees.

Given that none of us know your exact situation, no one can tell you what to do (and it would be irresponsible to give you financial advice anyway, haha). If you can save an extra $2k by waiting and you don't mind the risk that it might not happen, go for it! :)

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Uber Geek
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  Reply # 1379896 4-Sep-2015 16:47
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timmmay: Well the immediate effect for me is we pay a months payments (which is no problem) just to switch from 6.4% to 6.35%, though I should get a discount off the advertised rate. The gain comes when we lock in a lower rate in a few months, and the gain is over a couple of years.

I think given the general trend is downward the sooner I break the less it costs, the more we save. We have a spreadsheet to calculate whether it's worthwhile a mortgage broker gave to my wife, it indicates at least $1K savings, but maybe $3K if rates go to where they're expected, taking into account the break fees.


They are making a big margin off you, considering they are offering depositors anywhere from 0.1 - 3.75 % on oncall deposits. The thing abut banks is that they never lose. I wouldn't expect to see rates increasing much for a while, basically because the economy isn't great, and the world situation is only worsening. 

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  Reply # 1379907 4-Sep-2015 17:18
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Yeah I know banks never lose. I broke out of my fixed rate because my best guess is rates are sliding. I'll let it float for a few months then fix portions as it seems to make sense. This article suggests rates could even get down to below 4% at some point. I want me some of that.

Of course I spread my risk and rate profile.




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