With the latest round of interest rate cuts we are now able to get some fairly sharp rates in the fours. This has meant that many home buyers are now looking at some fairly low repayments when considering their next move. We expect further competition to reveal the true extent of the new pricing in the coming week.
Our suggestions are:
- Apply the amount you save from lower repayments towards reducing the principal of your mortgage. An extra $50 per week could reduce the term of a home loan of $400,000 by 5 years, and save you around $70,000 in interest over the term of the loan.
- Always have quote from a competitor bank quote on hand when negotiating a rate with your bank (or ask us to do this, we can help you refix with Westpac, BNZ, ASB, ANZ and the Co-operative Bank).
- Don’t expect that you will get good advice on the future of interest rates – no one knows this. If you are unsure on what to do, hedge your bets, fixing both long and short term rates.
This article has been written by Hamish Patel, mortgage broker with mortgagesonline.co.nz. Ph: 09 625 4693, Mobile: 021 625 693, hamish@monline.co.nz
