Yes and because the move will be into fixed term, the result will be even more pressure on fixed term rates. All sure signs of a sick economy. Throw in the rise in taxes we know must come and in rates and insurance and fuel and freight and food and all govt fees and clothing and electricity and gas, jeez what's left? End result will be less spending on stuff, more home vege gardens, an increase in thieving and the need for more police, more converted containers to keep the crims in, more WINZ frontline staff to cope with the extra unemployed. Oh this is going to be a fun place to bring up a family. Those who are not on a floating rate, but are trapped in a fixed rate due for refi in say 2011, man are they going to be happy as. They can't afford the break fees and they know now they have missed the boat. They are looking at rates over 10% by 2011.

Glad, I have listened to Tony Alexander from BNZ and fixed in March 2009. Now it would be 2-3% more.

Shean

Fix was only for two years - was halfway into it, ie only one year to run. At the time, no one knew how long the existing low point would last for (as it was, about 2 days - I got my 2-year fix on the other portion in just in time!).

But here's what I'm saying: if I'd had perfect foresight and the willingness to sit down with endless spreadsheets and work out all the possible permutations over the next 2 years (which is the longest I ever fix for - life is too unpredictable and I know all about being locked into real estate in a way that hurts) maybe I could've saved a buck or two by breaking and refixing.

But life isn't all about the extra buck or two you might save, it's about getting the best deal you can for the life you want to live. And I realised I could achieve a very similar result over the year left to run on my fixed portion by upping the payments the way I did. All I'm suggesting to others who have similarly split mortgages is that they might like to investigate whether this would work for them.

Wally is onto it... shame the survey finshes at 10+%... would've been interesting to see who realises that it could hit 20% again like in the 80's. Get tough now, pay of the loan real fast and get debt free. Changing my spending and reviewing my mortgage, i have reduced my term by... 19 years!.. Plenty of guys earn a LOT more than me. However the mortgage might be bigger too I guess. Trouble is there is this idea that a 25 year mortgage takes 25yrs to pay off. Stick it to it in 5 is my advice! Trouble is we love our comfy lifestyle and are quite happy to let this steal 20 years of our life in struggling with debt, and then be 20 year behind in savings etc...
Work hard, save hard, grow your own veges now!

...Wally: Though currently my cash is departing in paying off the loan, by doing this I am saving myself (and the economy) vast swathes of interest going offshore over the next 20 years. When I'm debt free, I will also have a (relatively) huge surplus of income that will no longer be needed for debt servicing and this can then be spent on other things (Won't be going in to offshore investments!).

The cash departing the country now is not mine anyway, I am just repaying my debts to whoever I owe it to.

I hear that the idea of 50 year mortgages has been floated... no questions who would benefit most out of this! The first 20 years would just be 99% interest.

When will the love affair with credit end? The whole world is eating itself up on I WANT MORE!, I WANT IT NOW! (...or I'll have a paddy?)

Sorry Wally, I'm already paying income tax on this... sure I'll have to pay GST if I spend it but so what? Even if the tax rate goes up to 50% or more, the taxman (he's a nice chap really) will take it whether I have debt or not. The net result is still more disposable income. If my interest paid per annum is $10-$15K, doesn't matter how you look at it, that a fair bit more 'spare' coin... besides if I'm in the habit of paying an extra $2500 per month of the mortgage, when its gone, this extra will be very welcome.

How much debt do you have Wally?

What tends to be the case is those earning big spend big, the amount of disposable income is not necessarily closely related to the income. Have to keep up appearances and all.

Beside, where would we flee? To Aussie? Looking pretty grim there too. If you want to run to Macedonia or Brazil or middle earth or something, go for it, but this is the real world.

Come on guys, someone stand up for a bit a good old thrift, patience and restraint.

Let's not knock the taxman too much, I sincerely hope to pay more and more taxes...
A couple of million dollars in tax a year would be great!

But I do think raising GST is a great idea. 20%? The lower income families could be compensated for this with a 20000 income tax free threshhold, or similar.

Let face it, the money that some avoid or evade is worth a lot more than the tax paid by low income earners.

Steps, once you start messing with gst this and not that, it leads to chaos. There is not reason why councils could not establish alotments, other than pure bloody pig headedness on the part of beaurocrats. They work well in the UK and would do so here. Then it's over to families to do the hard yakka. Given the 'speed' of the govt 'strategy' and total lack of concern over property being unaffordable, I don't fancy your chances of seeing a dam thing being done apart from the container conversions that is, oh and the evasion of MP perk disclosure.

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