Interest Rates

[JABlog]

Hi Drelly, let me know how you get on with Westpac please, I'm thinking the same, I have argued with them in the past about why they have two different floating mortgage rates. We are on the 6.24% one but under the government employee package we do get .5% off, but that just about matches every other banks full floating rate.
Love the bank and it would be a real pain to change 6 mortgages over.

The lower rate comes with a $250 p.a admin fee which negates any gains ...

[Austrokiwi]

The lower rate comes with a $250 p.a admin fee which negates any gains ...

A one of fee of NZ$250 negates any possible gains of lower interest rates? Please explain more particularly over what period of time are you calculating the gains?

[north shore]

Hmmm, how can they charge a $250 admin fee on a floating mortgage? thats would be a new one for them.

[essence]

As predicted, Public Trust have reduced their Floating Rate to 4.99% (wef today).

I know that I said <5%, maybe I'm being a big optimistic but..... why not floating rates @ 4.5% by the of this year??? Wouldn't that be great!!

Oh, btw, 65% of all mortgages are now on floating rates.

Just read this. Great to see the Banks are helping (as much as Banks can <- sarcasm!!) people who are in dire circumstances.

[drelly]

Hi Drelly, let me know how you get on with Westpac please, I'm thinking the same, I have argued with them in the past about why they have two different floating mortgage rates. We are on the 6.24% one but under the government employee package we do get .5% off, but that just about matches every other banks full floating rate.
Love the bank and it would be a real pain to change 6 mortgages over.

I had already gotten a 0.5% discount without any problem but it's a thorn in my side that they're treating their customers like idiots with their "standard rate". So now I'm down to 5.49% but it should be more like 5.1%.

[north shore]

Cheers Drelly, I totally agree with you there.

[JABlog]

Hmmm, how can they charge a $250 admin fee on a floating mortgage? thats would be a new one for them.

It has being reduced now to $9.95 per month.

http://www.westpac.co.nz/money-packs/resources/fees/home-loans/

[north shore]

sorry JA blog, I misread your original post, yes I told my personal banker what I thought of that one when we asked what the difference was between the two different floating mortgage products.

[JABlog]

I agree, and they would happily keep charging you these until you kick up a fuss- Just recently they customers have got the upper hand - I remember few years they dictated everything and you had no say.
Now because of competition and the current state of the economies and media , its more transparent.

[Austrokiwi]

Account maintenance fee...SAY WHAT!!!!!!!......... Why are they charging an account maintenance fee on a mortgage? Isn't it just another way of gouging money out of customers. They are already getting interest and in some cases insurance commission ( if they require mortgage protection insurance and broker it). Are mortgage interest rates in NZ actually the published rate plus fees.


However I see they have a re-documentation fee of NZ$250.00. Is that what you have been referring to?

[north shore]

Hi Austrokiwi, no its not a re-documentation fee its a $9.95 monthly charge on the choices everyday loan, this loan is on the rate 5.6%, the choices floating loan is on the rate of 6.24%.
What is the difference between a Choices Everyday loan and a standard floating loan?

Choices Everyday home loan account gives you one account for your home loan and everyday banking. Any spare money in your account works for you by reducing your home loan interest costs and can save you money.
Features include:

• revolving credit that allows you to withdraw money up to your limit and repay your loan without restriction
• choice of either a reducing or non-reducing limit
  reducing limit: your loan limit reduces each month to ensure your loan is paid off within the agreed term
  non-reducing limit: you manage your money and make payments your way
• choice of having part of your loan on a fixed, capped or standard floating rate.

Click here for more information about the Choices Everyday home loan account The Choices Everyday interest rate is currently lower than our normal standard floating rate. You can view our current interest rates here.

There are different account and transaction fees for Choices Everyday and standard floating loan. Click here for fees and charges.

[drelly]

Got an appt with Kiwibank this week.

[north shore]

I loathe the paperwork associated with applying for loans

[essence]

From Goodreturns website, 21/5/12

More home loan rate cuts to come

It was a huge week in the mortgage market with banks slashing fixed-term rates across the board and, if Friday's sharp move lower in wholesale interest rates is any guide, there should be further cuts in the coming week.

Monday, May 21st 2012, 6:00AM
by Jenny Ruth

The big question is whether the banks will come under pressure to cut their floating rates too – although brokers report it's possible to get significant discounts on published floating rates.

The market is now pricing in a 2.05% official cash rate (OCR) by October compared with 2.5% now and one to five-year swap rates fell a further 19 to 21 points on Friday.
“From the point of view of the average household, it probably looks pretty good at the moment,” says Darren Gibbs, an economist at Deutsche Bank.

“But you've got to ask why are rates falling – investors are worried about the world they see,” Gibbs says. “It's a pretty dangerous place out there.”
Whether rates go lower still will depend on the outcome of the Greek election on June 17 and whether or not Greece remains in the euro zone.
In his weekly commentary, Tony Alexander at Bank of New Zealand summed the situation up in one word: “Bad.”

Not only is Greece likely to leave the euro, but China's economy isn't growing as fast as expected and dairy prices are plummeting. “It's just not possible to paint a bright, rosy picture for our economy with so many bad things happening offshore,” Alexander says.

As for those mortgage rate cuts, Kiwibank kicked off them off by lauching a one-year fixed “special” at 4.99% on April 26, the same day the Reserve Bank opened the door to a cut in the OCR.

Nothing happened for nearly two weeks and then, on May 8, SBS Bank cut its three-year and five-year rates, the latter by 70 basis points to 6.2%, as well as offering a “special” five-year fixed rate at 5.99%, still the lowest five-year rate in the market.

ANZ National Bank followed the next day with a 40 basis point cut to its one-year rate to 5.25% and that seemed to open the floodgates.
Westpac, ASB Bank, and a number of other lenders also cut a range of fixed rates.

By the end of last week, TSB Bank had the lowest standard one-year rate of 5.2%, BNZ the lowest standard 18-month rate of 5.1%, TSB again had the lowest standard two-year rate at 5.5% and AMP Homeloans had the lowest standard three-year rate of 5.75%.

Bold highlighting is mine.

[JABlog]

sorry JA blog, I misread your original post, yes I told my personal banker what I thought of that one when we asked what the difference was between the two different floating mortgage products.

One is suitable for PPOR loan ( Choices Everyday loan) and the other an IP? for taxation purposes. half a percent difference!