Fix or Float - given inflation etc?

[drelly]

I wonder who owns the pub up there these days?...

which pub?

[One]

Just refixed for a year with kiwibank at 5.65%. Asked nicely and they waived the $100 refix fee.

A small trap: when we got the mortgage 18 months ago, we got it IO, but they only gave us the 18 months IO. So I had to reapply for that. $200 fee, but I didn't even have to ask to get that fee waived. They said there's a max of 5 years IO total on a given loan. I'll worry about that in a few years.

Seems unlikely that floating rates will drop below 5.65%, but I didn't feel like cutting off our options for longer than a year.

Interesting calculator at http://www.interest.co.nz/news/54578...-stay-floating

[Tan]

They said there's a max of 5 years IO total on a given loan. I'll worry about that in a few years.

Exactly what I was told. 5 years has come & gone, and I'm still on interest only. No idea how that happened, but I'm just keeping quiet & going with the flow. I guess I could change banks if I had to - or start paying down the loans .

[speights boy]

Kiwibank offers 'book a rate' home loans at 'special' rates; Kicks off with 6.95% offer on 5-year fixed-term loan

http://www.interest.co.nz/news/55472...ixed-term-loan

[mortgage broker]

A lot of banks have a 5 year limit on interest only, but they don't really seem to pay any attention to it. The criteria for extending or renewing an interest only terms is based on the mood of the banker at some banks.

[One]

Kiwibank have 5.99% for 30 months and ANZ/National have 5.5% for a year. All limited time specials.

Maybe we fixed too soon!

[mortgage broker]

long term rates in the sixes start to look good considering our long term averages

[Bluekiwi]

It could get tricky soon.
If things are moderately depressed for a long time, then its safe to float.
But if things get really good (not much chance really) or if things get really bad (who knows how) then rates go up (different reasons).

The key is, being ready to move ??
But move too fast and you fix too soon, and move too late, you might be faced with substantially raised long term rates and quickly rising floating rates.

[NovInvestor]

I'm fixing my ANZ ones for 12 months @ 5.5%.

Current floating is 5.49% so why not?!

[Bluekiwi]

The only risk is that the rates jump in the next 12 months, and you miss getting into a good 2 or 3 year rate, that October 2012 both floating and fixed rates are significantly higher.

[NovInvestor]

I want to float regardless, no plan to fix for long term even at Oct 2012.

The reasons why I fixed now:
1) I'm not refinancing/top up any of my 2 loans
2) 5.5% is just about what I'm paying @ 5.49% floating
3) I plan to float for a long long time

[donna]

Just been on the Property Tutors webinar and Nick Tuffley (ASB Chief Economist) says 2yr fixed is slightly ahead of floating right now.


Cheers,

Donna

[Bluekiwi]

Those webinars have quite a lot of good content on them by the looks of it, with Matt Gilligan also involved I believe, and now the bank economists.
I havent had the time to listen as kiddies keep my busy but it looks quite valuable.

You have to remember they said the same thing 6 months ago and were all proved wrong.
Of course they will never ever admit that.

[NovInvestor]

The floating rate may drop, who knows what is gonna happen.

[donna]

Yeah - I was surprised as I thought floating was way ahead.

It's good to get the run down on the financial/economic health of NZ (in layperson's language).