mortage interest rates

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12 years 6 months ago #21143 by devan
mortage interest rates was created by devan
Ok all you onto it financial people out there.... a little advice please. My mortage is now on floating and i am thinking i should re fix it. What do those in the know think will happen with interest rates? Should i wait or do it now? I'd like to fix for as long as poss, what term do you think i should go for?

ta

The trouble with some women is that they get all excited about nothing,and then they marry him.

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12 years 6 months ago #307814 by max2
Replied by max2 on topic mortage interest rates
My Opinion
Our one in Aussie has gone up 3 times in this 2nd half of the year, and i reckon banks will be quick to try and catch up on their (our) losses, my term of reference is the state of my superannuation funds, lots of losses (medium risk funds) so before the end of financial years in both respective countries, fund managers will be out there to show some sort of return for the discontented investor/worker by cranking up the mortgage rates. In some circumstances higher interest rates in relatively safe countries like NZ and Aussie are seen as good investments so it brings in more overseas monetary investment both countries require to tick over.

So, as ours come out of higher fixed terms we are going to re-fix as appropriate to our needs but at still lower rates than what we are paying at the mo. having said that, the village house is on floating rate and we have taken a repayment holiday for 3 months whilst getting ready for the market. I am happy with that decision for the short term.

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12 years 6 months ago #307821 by GrantK
Replied by GrantK on topic mortage interest rates

devan;292047 wrote: What do those in the know think will happen with interest rates? Should i wait or do it now? I'd like to fix for as long as poss, what term do you think i should go for?

I read widely on this subject, and nobody, nowhere is saying that interest rates will go down.

Many people say you have already missed the boat by not fixing before now. To some extent that's true; the lowest rates were in Jan/Feb this year.

However, I would look at it this way:

- What will you gain by waiting? You could stay on floating for longer and save some cash.

- What might you lose by waiting? Fixed rates are most likely going to increase further, so you could lose quite a lot.

- By fixing now, you can work out what the rate is for the next 5 years, and lock it in. So you have some certainty for an extended period.

My advice would be to fix a good chunk of it for 5 years. And if you think there's any possibility you could make extra repayments over and above the 5-year fixed mortgage, leave some of it on floating to give you that flexibility.

My 2c worth anyway...

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12 years 6 months ago #307824 by wyseyes
Replied by wyseyes on topic mortage interest rates
Fix 60% of it.

I read in Consumer that having a partial fixed/partial floating is one of the most flexible methods. You continue paying off the fixed at a steady known rate, and any bonus income you receive will bite into the floating and reduce the interest paid there.

If you find the floating paid off before the fixed term is up, then the lender may let you increase the fixed payments for a short time, or slap on a lump sum.
Try to keep at least 60-75% on the one with the lowest interest rate, which will most likely be the fixed.

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12 years 6 months ago #307828 by blimeyvicki
Replied by blimeyvicki on topic mortage interest rates
I think that the last I heard was that the Reserve Bank would be keeping the rates low until Mid next year?? Not quite sure but have a look at www.interest.co.nz . This website monitor interest rates and are pretty on to it as to what is going to happen with them. I think they have just had another OCR announcement which left it the same.
I am sticking with floating at the moment - it has served me very well for the last year! Check out the rates the different banks have before you fix as well - there can be quite a difference.

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12 years 6 months ago #307829 by ccrk9
Replied by ccrk9 on topic mortage interest rates
the rates are going up - we fixed last year for two years at 5.85% and now most banks are offering 6.9% for two years. Its still better than the nearly 9% we were pating....so while it looks like rates are going up I dont think they will hit the 9% range in the next year...

The greatest fine art of the future will be the making of a comfortable
living from a small piece of land. ~ Abraham Lincoln ~

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12 years 6 months ago #307842 by jen
Replied by jen on topic mortage interest rates
Well with the news that house prices a re back up to pre-recession highs in some parts of the country the interest forecast may yet change. Seems like you can't win though. BEcause the US dollar is so low, our dollar is looking 'high' .. which is bad for exports, raising the rates to curb the housing market would affect the dollar too...
so before you know we're back to where we were 18 months ago.. except then its also being said that the hard times might not quite be over....

Its so hard to tell. Personally. I have some fixed and some floating. Anything that I'm not likely to be able to pay chunks off in the next 6-8 months I am fixing. The smaller amounts that I'm hoping to whittle away at this year are still on floating. If the rates climb.. I'll just have to whittle faster ;)

jen (returned to townie life)
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12 years 6 months ago #307853 by reggit
Replied by reggit on topic mortage interest rates
Part fixed, part capped (like floating but better [;)] can go down but can't go up!)

You have probably missed the boat for longer term fixed rates (we locked part of ours in earlier this year at 6.75% for 5 years for some surity of rates).

No way of predicting it really. My crystal ball is very cloudy [}:)]

Much of it comes down to what you are comfortable with. We usually work out what we can pay off in a certain time, leave that amount floating/capped and lock in the remainder for that corresponding length of time.

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

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12 years 6 months ago #307881 by Pumpkingirl
Replied by Pumpkingirl on topic mortage interest rates
I have my mortgage in two parts, and because there is only my income, and managing money isn't my forte, I tend to have both fixed, although earlier this year I did have one lot floating for some months on a very low rate.

It's swings and roundabouts - while one half of my mortgage was enjoying 5.5% floating for quite a few months, the other half was sitting out its fixed rate at 9.4% :( [}:)] set at a time when floating rates were even higher[}:)].

However, in previous years it has worked out in my favour, with quite low fixed rates for both due to lucky timing.

I was reading Martin Hawes' latest book and his advice is to have an even (or so) split, with some fixed, some floating, or both fixed if you're like me and not so good at saving.

Ideally, the two "halves" should be coming up for renewal at different times - one comes up for renewal one year, the other comes up the following year for example (if you're going with fixed rates).

He also believes that unless you get a super duper rate, you should not set a fixed rate for more than 2 years, for a variety of reasons.

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12 years 6 months ago #307914 by DiDi
Replied by DiDi on topic mortage interest rates
Just knowing I am no expert on this, not having a mortgage, I wonder if you should be looking at what the Banks are offering for Term Deposits to get some idea of what they are anticipating. Rates for deposits have fallen in the past month.

For example, for a Term Deposit for 5 years, they are offering around 6.75% and a Mortgage for around 8.65%. Looking at the rates in interest.co.nz you are effectively looking at a 2 to 3% difference between lending and borrowing.

For two years, a Term Deposit of 5.3% and a Mortgage for 7.25%

I guess if it was me, I would be weighing up the size of my mortgage and working how much I can afford to pay. Who on earth would know, with ETS committments and $250 million being borrowed every week by this country, how it will affect us. I suspect that the banks and the country will find it harder to borrow funds on the world economy and that means interest rates will rise. However - I have no more idea than any of you so would base it on setting to a level I know I can afford for as long as I can forsee and just bite the bullet with whatever the world economy throws at us - win or lose on interest rates.

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12 years 6 months ago #307970 by devan
Replied by devan on topic mortage interest rates
thanks for the advice. I spoke to my bank manager too and she suggested keeping it on floating at the moment. The fixed rates aren't particularly good and even the 18 month rate is 6.59% where as the floating is 5.59% so i will just keep an eye on things. I too am in the position of being the only income and things do get pretty tight! but i am managing. I guess if worst came to worst i'd have to suck it up and get a flatmate in or some grazers :( which would really suck cos i love living on my own

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