25 Year Fixed Rate Mortgage

[LondonKiwi]

Thought the rest of you might be interested to see what was available here now in the UK.

http://business.timesonline.co.uk/tol/business/money/mortgages/article1570892.ece

LK

[donna]

Hi Andy,

How does the rate compare against short term fixed?


Cheers,

Donna

[xris]

Interesting to speculate what would happen here if the banks offered 25 years fixed at 5.25%

xris

[Tim Roach]

Thanks for this LK.

Five years ago I signed up for a capped rate mortgage with Standard Life Bank in the UK... capped at 6.25% for the 25 yr term (tied in for the first five years).

Recently I have thought about using some of the equity I have in my UK property to buy more property here i.e borrow in the UK at lower rates than NZ (I play the exchange rate game but since I'm in property for the long term I'm not too worried about that).

I approached my existing lender about extending my borrowing because I didn't want to cash in my current term mortgage... Standard Life Bank wanted to charge me .5% above their variable rate (they gamble that I wouldn't want to redeem my existing capped rate loan). This could give me some more options....

[LondonKiwi]

Hi Andy,

How does the rate compare against short term fixed?


Cheers,

Donna

Hi Donna

That's a tricky question. Over here there are so many more products compared to NZ and therefore rates.

Have a look at what Lloyds TSB (who I work for ) offer for fixed rates on this link

http://www3.lloydstsb.com/mortgages/fixed_rate_mortgages.asp

Confusing eh!!

As an aside I have thought about using UK based loans for NZ based property and hedging against the exchange rate changes too.

LK

[tricky]

Investment loans at 1.9%

I got an interesting email today which starts off:

Hi xxxxxx
Would it make a difference to your investment options if you could borrow your funds (purchase or refinance) at 1.9% to invest in Australian & New Zealand property. We have clients who have regularly been doing this. The only catch was that they were all based in Japan and it was not an option for our other international investors. But at last this option is now available to investors who are resident in other parts of the world. A few important details before we go on:
· Residency, if you are resident in Australia or New Zealand then this is NOT an option for you (sorry and believe me I know exactly how you feel).
· There are exchange rate risks involved as we are talking about an interest rate currently around 1.9% in Japanese Yen (JPY) , not in Australian or NZ dollars.


And it continues with plenty of warnings about the risks of multi-currency loans before giving details of who to contact in Tokyo.
A 2% morgage would make every property cash positive.
*sigh*

[Rolf]

25-30 year fixed rates are the norm in Denmark where I'm from, but I don't know about the other European countries.
I was quite surprised to learn that a fixed rate in NZ does not mean fixed for the term of the loan...
Also credit institutions are the main lenders in Denmark, and not banks. But the market has just been de-regulated a bit further and now banks are able to offer loans on similar terms and with as low rates as the credit institutions - so property prices are likely to continue up in Denmark I'd say.