Interest Rates

[Don't believe the Hype]

Which bank let's you fix for three months? I asked bnz and they said 6 months is the shortest period they can do...

i think blue kiwi means you can get the bank to 'lock a rate' 3 months before you have to fix so if you take a 6 month fixed rate you can agree the next 6 month rate three months into your fixed term

[Judge]

ok, got you. This makes sense. Thanks.

[recemember]

A penny for your thoughts on the market

Hi all, we've purchased with a settlement of 10 June, one day following the OCR announcement on 9 June. Where it is widely anticipated that the OCR will drop 25 basis points. As part of some portfolio jiggery-pokery we have $1,100,000 to fix across investment and personal.

Personal I want to lock in for longer and have been offer 4.49% for 4 years, pretty sharp I'm thinking.
I prefer to keep the rental terms to 2 years at a time and can lock in 4.05%.

Granted it's crystal ball gazing, but given most banks have recently dropped their rates (I assume in anticipation of a cut, deposit rates falling and what overseas markets are doing) do you think it's not silly to take the rates and run, or better to float all on settlement in hope that a cut in OCR will be reflected in 2 and 4 (or even 5) year rates.

Any thoughts would be much appreciated.

Cash back is close to 1% of borrowing and is regardless of fixed term or floating, just bonded to ASB for 2 years, which I'm fine with given that is we anticipate fixing with them.

[Don't believe the Hype]

Both rates are very competitive in today's environment...

fixing rates is a risk minimization strategy - it is there to ensure you know what you're cash flow requirements will be and to protect YOU against increased interest rate risks. It it is not about TIMING the market to hit the very bottom of the interest rate cycle. Despite what people will tell you no-one here or anywhere can tell you with any certainty which way interest rates are going..

You need to decide if these rates give you the protection against upside risks you're after... If yes then go ahead and lock.

if you do decide to lock, you might consider locking different periods for part of your mortgages so in the event when you do come off fixed if rates have increased dramatically you don't have a big and immediate hit to your cashflow.

[recemember]

Thanks DBTH. That has been my approach to date. It's just given the proximity of the dates a vision of me two weeks after settlement missing out on a lower rate is very vivid. However I am happy with these rates and they are in fact lower than I was originally budgeting on so happy days. Thanks for the slap in the face You know, the good one which makes you see sense again.

[Don't believe the Hype]

Thanks DBTH. That has been my approach to date. It's just given the proximity of the dates a vision of me two weeks after settlement missing out on a lower rate is very vivid. However I am happy with these rates and they are in fact lower than I was originally budgeting on so happy days. Thanks for the slap in the face You know, the good one which makes you see sense again.

This happens all the time, people get caught up in small things that take their focus away from the bigger picture. If you critique all your investments with the benefit of hindsight you will spend a lot of time thinking of what you missed not looking towards the next opportunity.

If you're happy with this good deal take it and move forward looking for the next one.

Having said that, this deal is not locked yet so if you think you can drop the rate a week after settlement you have 2 options:
1- see if you can delay settlement a week... If agrees by both parties there will be no penalty interest payable due to late settlement because you both agreed to change the date

2- take a floating rate initially and lock the loan post the int rate announcement - only risk I see here is that the bank may not honor the rate they've already quoted you.

good luck

[Perry]

Bill English worries about homeowners too stretched to cope with interest rate rises
5 June 2016

At the Hutt Valley Chamber of Commerce's annual post-Budget lunch, Finance Minister Bill English is worried about the number of mortgage holders ill-prepared for interest rate rises. English said he was somewhat surprised interest rates had reached such lows.

[chrisgoh]

How NZ keep interest rate low if USA start to increase the rates?

[Bluekiwi]

I have some amounts, small I guess, that are fixed to 2018, but they are a bit nasty and high.
Break fee is not nice.

But I am thinking that if I take the break fee hit, then I can either fix long at 5 years rates, or maybe keep them on a 6 month fixed shoe string in anticipation of rates rises.

Oil, US, political stuff, financial Armageddon, just seems to have quietened down a bit ...........

But then, we have been there before many times haven't we.

[Bobsyouruncle]

USA isn't increasing rates. They keep talking about it but currently .51 lower than 1 year ago. Current average rates are asme as 2 years ago and less than 3 years ago and that's before points which are also lowest they have been since 2008.

[Bluekiwi]

Whats best 5 year rate people are getting these days, and what is best 5 year rate at Westpac.

[Beano]

USA isn't increasing rates. They keep talking about it but currently .51 lower than 1 year ago. Current average rates are asme as 2 years ago and less than 3 years ago and that's before points which are also lowest they have been since 2008.

The US CD rates have risen slightly.
My US deposits on 12mths term have risen .1%

[Beano]

Whats best 5 year rate people are getting these days, and what is best 5 year rate at Westpac.

Don't know the 5yr rate but the 3yr rate is 4.3pc with the westpac

[donthatetheplayer]

Has anyone got any great rates lately? What about cash offers? I'm looking to fix and want to make sure I'm getting the best rate offers. Thanks.

[Bobsyouruncle]

The US CD rates have risen slightly.

Agreed, mortgages haven't followed though.