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Anyone with a mortgage overseas? What interest rates are you paying?

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  • Anyone with a mortgage overseas? What interest rates are you paying?

    Anyone with a mortgage overseas? What interest rates are you paying?

    A work colleague of mine, from UK, says his interest rate for his rental in UK has been 1.5% for the past few years.

    If you own a mortgage overseas, and paying a lower rate, do you feel you are getting shafted by NZ banks?

    One thing I also want to know too, is if the OCR (NZ) is 3.5%, and the banks add margin on top to make profit, who gets that 3.5%? Don't banks get that already? I guess they must pay the depositors huh.

  • #2
    Originally posted by Gary Lin View Post
    ....... do you feel you are getting shafted by NZ banks?
    Oh; bless.
    Must be a slow day at the council today.

    I guess they must pay the depositors huh.
    Well done Sherlock.

    Comment


    • #3
      Asia is awash with cheap money as you know. I have had some US loans but never cracked the Asian banks. Interesting news article this week about Russia (Ithink). They have a lot of foreign swiss loans and their currency has devalued so much they are defaulting in their tens of thousands.

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      • #4
        Hey Damap, what interest rates can you get in the states?? I heard that you can get something like 4-5% over the entire term of a 30 year loan?

        I thought US and Euro would be awashed with cheap cash given they have printed so much money the past few years. Then again China & Japan printed a lot too.

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        • #5
          Foreigners can get 5ish percent if you know the right people. Can get up to 50 year amortization but usually they call the mortgages in at ten years and you have to refi. Locals can get 50 year fixed at under 4%. Of course America has LOTS of private money foreigners can borrow and that ranges from 5 to 15% depending on the deal.
          I have often tried to find a way to get loans from HK or Singapore but could never crack the code

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          • #6
            Originally posted by Gary Lin View Post
            Anyone with a mortgage overseas? What interest rates are you paying?

            A work colleague of mine, from UK, says his interest rate for his rental in UK has been 1.5% for the past few years.

            If you own a mortgage overseas, and paying a lower rate, do you feel you are getting shafted by NZ banks?

            One thing I also want to know too, is if the OCR (NZ) is 3.5%, and the banks add margin on top to make profit, who gets that 3.5%? Don't banks get that already? I guess they must pay the depositors huh.
            UK mortgage was just above 1% when I had it last year. Aus mortgage is 4.69%. Paying over the odds for many things is part of life in NZ. Not surprising as people don't seem very vocal about it and when offered competition from overseas which may reduce costs I often note people are suspicious/think overseas stuff would be lower quality/want to pay more for NZ owned and operated business products. Ho hum don't think it'll change any time soon.

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            • #7
              Originally posted by Eljay1 View Post
              UK mortgage was just above 1% when I had it last year. Aus mortgage is 4.69%. Paying over the odds for many things is part of life in NZ. Not surprising as people don't seem very vocal about it and when offered competition from overseas which may reduce costs I often note people are suspicious/think overseas stuff would be lower quality/want to pay more for NZ owned and operated business products. Ho hum don't think it'll change any time soon.
              Thanks for the info.

              I think one or two more economic shocks, Aus and NZ will have a near zero OCR, and interest rates will drop to on par with overseas.

              Comment


              • #8
                There is a significant difference between those subjects Eljay. a lot of overseas products that are cheap are crap so it is good to be cautious. And the issue with loans is currency movements so they are also quite scary if things move. I have never noticed kiwis being averse to overseas stuff where quality isn't so much of an issue. We buy a LOT of stuff now that is made in Thailand and India from NZ companies. I doubt the Warehouse has anything locally made in it either.

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                • #9
                  Originally posted by Gary Lin View Post
                  Thanks for the info.

                  I think one or two more economic shocks, Aus and NZ will have a near zero OCR, and interest rates will drop to on par with overseas.
                  Just in relation to the UK interest rate, that 1% would be for an owner occupier, I don't think you'd get that for a buy to let as the banks charge a slightly higher interest rate. I had a quick look and 2.4% reverting to below 5% was the cheapest interest rate I could see for buy to let mortgage.
                  Last edited by Eljay1; 29-01-2015, 03:26 PM. Reason: deleted my small rant

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                  • #10
                    Originally posted by Eljay1 View Post
                    Just in relation to the UK interest rate, that 1% would be for an owner occupier, I don't think you'd get that for a buy to let as the banks charge a slightly higher interest rate. I had a quick look and 2.4% was the cheapest interest rate I could see for buy to let mortgage. Still a lot cheaper than the eye watering NZ rate and don't get me going about the price of paint/wall paper etc if you need to renovate. I know people who can ship wallpaper in cheaper from UK than buy it over here.
                    How does the bank know if the property is owner occupied or buy to let?

                    Also after settlement, do banks have regular inspections to make sure the property stays as owner occupied?

                    For reno, the cost is mostly in the labour!

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                    • #11
                      Originally posted by Gary Lin View Post
                      How does the bank know if the property is owner occupied or buy to let?

                      Also after settlement, do banks have regular inspections to make sure the property stays as owner occupied?

                      For reno, the cost is mostly in the labour!
                      Ha ha, I deleted that after I'd had my moan! You have to ask the bank for permission to let it out if you start on a owner occupier mortgage and then they can take some money for your application and charge you a higher rate mortgage.. They don't inspect so will not always know if people have swapped over, but I think there is a fair amount of information exchange between mortgage companies and gov/tax office so you could get caught out.

                      Agree labour costs are huge but paint, wall paper, carpets for example are vastly more expensive here. As an example, just had to replace lounge carpet in UK (large lounge) cost is 275GBP fitted but with existing underlay. Also just replaced lounge carpet in NZ, cheapest I could get $1500 and the miserable sods then charged $50 on top to take away the old carpet. Grrrr.

                      Comment


                      • #12
                        Originally posted by Eljay1 View Post
                        Ha ha, I deleted that after I'd had my moan! You have to ask the bank for permission to let it out if you start on a owner occupier mortgage and then they can take some money for your application and charge you a higher rate mortgage.. They don't inspect so will not always know if people have swapped over, but I think there is a fair amount of information exchange between mortgage companies and gov/tax office so you could get caught out.

                        Agree labour costs are huge but paint, wall paper, carpets for example are vastly more expensive here. As an example, just had to replace lounge carpet in UK (large lounge) cost is 275GBP fitted but with existing underlay. Also just replaced lounge carpet in NZ, cheapest I could get $1500 and the miserable sods then charged $50 on top to take away the old carpet. Grrrr.
                        In NZ the banks have a "fire and forget" policy, basically after settlement, as long as you keep up your mortgage payments, they don't want to know you! Except of course if you want to buy their insurance or credit card products!

                        $50 on top to remove the old carpet I think that's reasonable!

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                        • #13
                          Originally posted by Gary Lin View Post
                          In NZ the banks have a "fire and forget" policy, basically after settlement, as long as you keep up your mortgage payments, they don't want to know you! Except of course if you want to buy their insurance or credit card products!

                          $50 on top to remove the old carpet I think that's reasonable!
                          Well it's reasonable in the local context, which is what I'm talking about. Removal of the carpet was included in the 267GBP quote to replace UK lounge carpet but not in the $1500 quote for NZ carpet. But anyway, getting off topic and I'm bored with moaning about costs so have moved on

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                          • #14
                            Originally posted by Gary Lin View Post
                            I think one or two more economic shocks, Aus and NZ will have a near zero OCR, and interest rates will drop to on par with overseas.
                            One or two more economic shocks enough to kill Aus and NZ's OCR rates might destroy the entire financial system. The US has started full recovery now, but the EU is still floundering. Greece's new elections looking like they'll get the country kicked out of the Euro.

                            I certainly wouldn't be hoping for global financial events to occur just to decrease my mortgage rate...
                            AAT Accounting Services - Property Specialist - [email protected]
                            Fixed price fees and quick knowledgeable service for property investors & traders!

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                            • #15
                              well most of the western countries are all tightly linked, all pretty much in the same boat.

                              in the end, when uncle sam sinks to the bottom of the ocean, everyone else will follow!

                              so as long as no one is spared, its a fresh start isnt that exciting for everyone ;-)

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