Mortgage rates starting to rise?

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15 years 4 months ago #17387 by reggit
Like many others, we are sitting waiting to see how low the mortgage rates go before fixing for a longer term.

Well, now is the white knuckle time of will they go up, will they stay the same, will they drop a bit...ANZ and National have just lifted theirs and I notice from the Westpac site that they have very quietly and very quickly followed suit.

Hmmm...what to do, what to do...? :rolleyes:

We have our bank on alert to fix ours in at the word from us, so will be a serious discussion happening over dinner tonight [;)]

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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15 years 4 months ago #258875 by Stu_R
hmmm dont like the sound of the upward movement :( i guess its the same as gas prices they came way down for a while a few months back .. they on the rise still now though

5 retired Greyhounds ( Bridgette , Lilly, GoGo,Sam and now Lenny) 15 friendly sheep all of whom are named and come when you call them :) , 2 goats, Mollie and Eee Bee :
Olive trees , .. old bugger doing the best he can with no money or land :)

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15 years 4 months ago #258876 by Simkin
I don't think interest rates will go up in the foreseeable future.

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15 years 4 months ago #258879 by moonshiner
Have they just lifted? Hmmm have just negotiated new rate for money about to be borrowed. The one year fixed terms are looking interesting.....

I reckon they will drop more before recovering but like yourself, watching with bated breath [B)]


~

The only valid censorship of ideas is the right of people not to listen. ~Tommy Smothers

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15 years 4 months ago #258880 by reggit

Simkin;237863 wrote: I don't think interest rates will go up in the foreseeable future.


My gut feeling is that at some time not too far away, they will start rising quite rapidly, but I am really interested to hear what others think as far as why they will or won't rise...

My lay-persons take on it is: banks are trying to attract investors and are using the increased competition for investors as an excuse to raise not just interest rates for deposits but rates for mortgages also (as they say in the article linked above).

So...if the banks continue to compete with each other for investors' dollars, and continue to link investment interest rates with mortgage rates, both will keep going up. The more scarce the investor dollars are the higher these rates will go.

As I said, that's my gut feeling. I just know I am personally going to feel more comfortable knowing that a large chunk of my mortgage will be at a given interest rate for a good length of time. We have a floating portion that can ride with the waves regardless. Sometimes a bit of surity amongst chaos is what you seek [;)]

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15 years 4 months ago #258883 by Stu_R
not having a mortgage due to no capital .. i agree with tiggers way of thing myself .. and if i did have one would be fixing a large portion of it now, and letting the smaller part ride .. at least that way i would know i could afford the payments on the biggest part :)

5 retired Greyhounds ( Bridgette , Lilly, GoGo,Sam and now Lenny) 15 friendly sheep all of whom are named and come when you call them :) , 2 goats, Mollie and Eee Bee :
Olive trees , .. old bugger doing the best he can with no money or land :)

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15 years 4 months ago #258885 by reggit

Stu_R;237870 wrote: at least that way i would know i could afford the payments on the biggest part :)


That sums my feelings up exactly, Stu, about our personal circumstances. Sometimes you just want a figure that ain't gonna change any time soon that you can hang your hat on [;)]

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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15 years 4 months ago #258890 by organicltd
why would you bother fixing at all? I have a revolving credit facility. This is at the floating rate of 5.9%. At the peak last year it was 9.5%. It will be a very long time before it gets anywhere near those levels again. If you could afford to pay last years rates then why bother to fix now?

Wine does not make you FAT it makes you LEAN...
....against tables, chairs, floors, walls and ugly people.

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15 years 4 months ago #258895 by reggit
We have a portion of ours on capped rate which sits at floating and cannot go higher than 10% until it expires at the end of next year. That is our priority to pay off in 5 years.

While we are paying off that portion, we want to fix the remainder for 5 years so we know exactly what we have to pay on that amount.

I don't believe, based on the mortgage rate patterns over the last 13 years of our last mortgage, that it would take very long at all to reach 9.5% [:I] it had also been down to current levels at least once during that 13 year period. Yes, we could afford to pay 9.5% again, but if we can get it stabilised at 6.5%, then why not?

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15 years 4 months ago #258896 by max2
We have one due to mature in November and recently looked at getting out of the current 9.09% fixed rate (der wasn't that a good idea at the time) but at a cost of $2,600 odd it didn't make sense.... for a loan just over $100,000.

My take on this is for those who HAVE to borrow, the banks are taking advantage of the brief situation and they might find no business in the short term.
Look towards the interest rates overseas as an example of what is happening and NZ is no different.

i don't believe NZ can sustain lower rates, however i believe my bank at least (BNZ) will have its regular short term specials regardless, which I will pounce on after November...

either way, what is on offer is at half of our current fixed rates. I would be fixing for longer terms if possible.....

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15 years 4 months ago #258913 by Stu_R
You and i think the same way i think tigger .. i like you, like to know that x$ is what i need each month for bills ... and from that i can work ... i agree with you totaly on fixing in that x$ ammount for your 5 year term .. at least then you know what ya gotta find each month :) .. its called knowing what you can afford, and still live :)

5 retired Greyhounds ( Bridgette , Lilly, GoGo,Sam and now Lenny) 15 friendly sheep all of whom are named and come when you call them :) , 2 goats, Mollie and Eee Bee :
Olive trees , .. old bugger doing the best he can with no money or land :)

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15 years 4 months ago #258919 by DiDi
As an investor without a mortgage I have been delving into this big time and I believe that the rates for investors will be well up within 12 to 18 months so am doing my sums accordingly.

With Mortgage rates, personally, I would be fixing now for between two to five years if possible. The market has as much to do with how much foreign lending we can attract as anything that might happen in NZ and with so many countries printing money ad lib, it is going to heat up again for sure. When is the operative question. Wholesale interest rates rose significantly on March 12th. Bollard won't go below 2.5% as it would be cutting our throats for foreign investment.

At the end of the day, each person's circumstances are different and if you can anticipate a windfall from inheritance, whatever in the short term then set it up to be able to reduce your mortgage but for everyone else - I think the security of knowing what your mortgage outgoings are fixed at is worth serious consideration. I am trying to talk my own family to fixing now! I am not an Accountant but do read widely and thus my own personal opinion. Not to be confused with doing your own research!

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15 years 4 months ago #258921 by max2
yep cool to Didi I agree, but pick you rates accordingly and choose wisely... don't rush if you don't have need to.

Lots of short term offers will come to the front, which can make a diff if you are prepared to put the yards in too.

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15 years 4 months ago #258945 by Prim
Well, um, in my very limited experience and reading, I think we personally have missed the boat :( On and just after the 29th of January decision to lower the OCR to 3.5%, our bank was offering 5.9% for all of their periods (incl 5 years). Sometime *before* the last OCR review (12 March), which actually reduced the OCR another .5% (ie to 3%), the long term interest rates went UP.

Bugger, bugger, bum. I was waiting to the 12 March review to consider fixing for 5 years so we had certainty for that period. So, I personally am kicking myself.

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15 years 4 months ago #258947 by DiDi
tigger - just wanted to say that you are onto it as far as I am concerned. I was off on my own tangent as usual knowing what I believe and overlooking the fact that you had stated your thoughts - and we are on the same wave length!

It is such an uncertain time for everyone and I just hope that our friends on this site don't confuse and hang out for getting the "potential" lowest interest rate against the reverse situation so many Mum and Dad investors did with buying into high interest returns with Companies who have now gone belly up.

It may go lower but for .% why not lock into what you know you can afford and don't look back. I personally don't believe it will go any lower but I am just me and one opinion in this uncertainty.

What I do know is friends (some retired) who had chased the big investment interest rates and spread their investments over a number of companies, only to have all in some form of collapse and now looking at what, 5c in the dollar? I am a very conservative investor as I don't want anyone taking my hard earned dosh down the tube with them. I hear it "you'll never get rich doing it your way" but...I may not be rich but I still have my money that I worked hard to save - abeit maybe not as much as if I had done it their way and bailed before it all went belly up. That is the problem though - we are all guessing to a degree and it is far too easy to miss the boat as they did.

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