Fixing the loan

[prayami]

Hi,

My home load fix term is ending in the beginning of May 2012 in ASB Bank.
I need the advice for the following things:
Should I wait for the expiry date and then re-fix or I should break the fix loan? If I should break, which will be the best time?
I am not sure , for how much time period should I fix the loan?

I was thinking to fix it for 3 years. Your advice will be really useful to have decision which can save my money.

Thanks in advance.

[ithink]

Hi Prayami,

It really depends on:

1. What your current home loan fixed rate is
2. What the penalties are for breaking your current agreement - very few banks will allow to break the fixed agreement for a "small" penalty - but I have heard that ASB is quite a good bank at that!
3. What the total savings are (interest saved on early break-up - penalties payable)

I personally think that the rates are going to be low(ish) right upto the end of next year, so if you are going to incur hefty penalties, I would suggest to wait till May next year!

Not an easy one alright, but All the Best..!

Cheers,

ithink!

[Tan]

I have one coming off about next easter & am leaving it floating.
It represents about 1/3 of my total mortgage, the rest of which is fixed to 2013/2014.

[mortgage broker]

Kiwi Bank and Westpac have dropped their rates over the past week, www.interest.co.nz

[Scott Miller]

4. What are your long term plans with the property? I.e are you going to hold onto it or sell once capital gain is realised.

[gumbii]

And now ASB have just dropped their rates as well. ASB's 5 year rate at 7.1% is now the cheapest and perhaps starting to look attractive.....

[Scott Miller]

It pays to remember that all lenders will match their oppositions interest rate offers - if you are finding this not to be the case contact your mortgage broker.

[prayami]

Thank you very much to all for reply.
I asked my ASB bank. Their penalty is $881. So I just saved $17 if I break now. No point of breaking it now.
So as per the above comments, I think, Wait till May 2012 and then I need to decide again whether to keep floating or re-fix for a particular term.

What are your long term plans with the property? I.e are you going to hold onto it or sell once capital gain is realised.

I am not going to sell this property. Thanks.

[drelly]

Without an understanding of your personal financial situation, no one on here can really give you any useful advice. What we think the rates will do is only half the story.

[prayami]

Hi...I got $27000 of load fix at rate 6.5%. And the fix term is expiring in the beginning of the May 2012.
As asked to ASB bank, they said $881 penalty to break the loan now. Thanks.