In this section
Offers for readers
The comment stream
Recent comments
- 1 of 8673
- ››
Editors choice
- 1 of 47
- ››
The news stream
Latest news
Most commented
- RBNZ hikes, but softens outlook 234
- Wednesday's Top 10 with NZ Mint 92
- Business confidence falls again 82
- Thursday's Top 10 with NZ Mint 66
- 90 seconds at 9 am with BNZ 62
- Dear John: 'Be careful what you wish for' 37
- 90 seconds at 9 am with BNZ 15
- Yellow Pages bidders offered loans 10
- The "Archilles heel" of dairying - effluent control 8
- No quorum for lender's meeting 7
Most viewed
Interest on Twitter
TSB raises 4, 5 year mortgage rates as mortgage curve steepens
TSB has raised its four and five year mortgage rates. It's four year rate was raised by 25 bps to 8.2%; and five year by 20 bps to 8.5%. The move brings TSB's longer term fixed mortgage rates up into line with Westpac, which raised its fixed rates earlier this week.
ASB is currently offering the highest long term fixed mortgage rates out of the banks, with its five year rate at 8.6%.
While variable mortgage rates have been falling recently, longer term fixed rates have been rising. This trend has seen the mortgage rate curve steepen as longer term rates have moved higher than short term rates.
See and compare all mortgage rates here.
Meanwhile, Credit Union North lowered its variable mortgage rate by 20 bps to 6.25% and its one year mortgage rate by 20 bps to 5.75%.
Credit Union Baywide cut its variable rate by 55 bps to 5.85%, but raised fixed rates. It raised its one year rate by 20 bps to 5.8%; two year by 20 bps to 6.85%; and three year by 30 bps to 7.85%.
The Police and Families Credit Union raised its one year rate from 5.49% to 5.7%.
It's a race to 10%.
It's a race to 10%. Which bank will win? Will 10% be the floating rate by 2011? Interesting times to come and for those in debt a boot in the bum. Right, who wants some cheap credit then?
Wally, house prices wont drop
Wally, house prices wont drop 30% as you were hoping. Sorry, but you missed out, again...
@Wally, Boot in the bum
@Wally, Boot in the bum for having debt? I don't agree. Currently we have the lowest interest rates for a long time and housing affordability is better (although not great). We bought our first home in May this year, and are absolutely happy. We love the satisfaction of having our own home, and guess what, our mortgage interest costs us less than what we were paying in rent! We are on short term rates of under 6%, and are using the extra money to pay our mortgage off fast. Even if we get zero capital gain on the house, we have still saved money, and we have a "debt" that costs us nothing and is going to reduce in "worth" by the rate of inflation. Yay for us and lucky we didn't listen to Mr Kickey! :D
I'm interested in your thinking,
I'm interested in your thinking, Osty.
Why do you think the banks are charging =,>8.5% for 5 year mortgages?
Harriet, because they forecast that
Harriet, because they forecast that the interest rates will eventually rise I suppose. However anything less than 8% is better than the long term average. Also, it was only 12 months or so ago when rates were over 10%! So even though the rate curve is quite steep now, the long term rates are still relatively low. Oh, and who knows what the rates will be like in 2 years time. They could go over 10% again, or they could flatten out. All I know is that we are benefiting from a few years of low rates now, and paying off as much of the mortgage while we can. When the rates do start going up, our mortgage will be falling...
Thx, Osty. I see you
Thx, Osty. I see you have given it a good deal of thought. My only comment would be that banks aren't daft. The >10% rates a year ago ( time flies!) you mention were variable to push people into 'lower' fixed at that time. Were the banks right ( for them) to get their income locked in high? Break fees were a heated topic of conversation thereafter. I suspect we will hear similar comments about the 'bad banks' herding practices again in the very near future. So by paying off debt as fast as you can, you actually do agree with Wally!
Harriet, yes you are quite
Harriet, yes you are quite right. I do see rates rising over the next few years, and it is a difficult choice at the moment between fixing and floating. However, we have been able to purchase a house this year, while we have been looking for about 3 years, and up until the recession, it has been uneconomical from a rent vs interest cost perspective. People seem to forget the fact that a mortgage devalues over time with inflation, and this is a reason why having a mortgage is a great way to save, providing it doesn't cost you too much, and you don't loose heaps on your house. We haven't bought at the peak, got a good price on our house which is in Dunedin so we have lower prices to start with, and our mortgage isn't costing anything, so we are pretty safe I figure. :D
Osty - you must live
Osty - you must live in a a very expensive rental part of the country. For instance in ChCh the house that I currently rent has a GV of $325,000, which I think is close to the current market value. For a 25 year mortgage at 6% that would mean weekly repayments of $483. Rates are approximately $2,000 per annum, $40 per week giving a total of $523 per week and on top of this would be buildings insurance and the cost of maintenance and repairs. My rent is $295 per week. I am certainly not even thinking about buying.
Again, I can't fault your
Again, I can't fault your thinking, Osty, and I can tell you as one who looks back on a liftime of home buying ( not house buying), that there is never a right time to buy ! and it's always easy to look back and do a 'but if only.." Just keep an eye open on your one big unknown coefficient; inflation. The jury is out as to what it will be, or whether there will be asset deflation. But as they say, as long as you stay in the same market.....and it's your home....
Shuttle, that house could have
Shuttle, that house could have been purchaced for 250k 12 months ago, with a deposit of 50K the payments would be 20 bucks more than your rent, you certainly should have thought about buying then. Would have had 125k equity now too...give it 5 years when rents creep up and your sitting pretty. I just dont get the shortsightedness by some posters on here.
buyerinchch: Is that your investment
buyerinchch: Is that your investment portfolio that been unleashed onto the Property Press today ! My God. It's been two week since I picked it up, and Bayleys have gone mad with listings....
buyerinchch - "that house could
buyerinchch - "that house could have been purchaced for 250k 12 months ago"
Absolute rubbish, which fantasy part of ChCh do you live in, house prices have dropped in ChCh over the last 12 months. I have been in this current property for 18 months and the house next door, which is exactly the same, was sold almost a year ago for....... $330,000. I have noticed that all the property promotors pull so called facts and prices out of thin air to try and justify their position. According to your guesstimates I would have made a six figure sum profit, whereas in actual fact I would have made a loss on the property and the mortgage payments would have been far higher than the rental payments I have actually paid. You sound like a real estate agent.
buyerinchch - I don't get
buyerinchch - I don't get the tunnel vision of some posters on here. But most of all I don't get how they don't comprehend that not all renters are worse off financially for renting. Depending on where you live, and what you pay in rent, you can actually be better. Yes, shock, horror, gasp, you can! Of course, maybe it won't always be that way. But who can know what the future holds.
I liken my current situation of renting v buying to those home owners that are choosing the low floating interest rates over the high long term fixed rates. Why are they choosing those low rates? TO SAVE MONEY! Yes, they save money in the short term and (hopefully) use the difference to pay down their debt. In spite of the fact that they know that interest rates will go higher eventually, they're making hay while the sun shines right now. Well, that's exactly what I'm doing, except I'm choosing to pay half the amount in rent each week as I'd be paying on a mortgage/rates/insurance/maintenance and saving/investing the money I'm saving. Perhaps my logic is flawed, but it's working for me currently.
And here's further evidence that
And here's further evidence that "asset bubbles" are not desirable:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1059...
Fantasy part of chch is
Fantasy part of chch is beckenham, and you've got to be kidding, had one valued at 255 12 months ago "if" it could be sold and just valued again at 305 last week. Brought another for 100k under rv 12 months ago, sales are currently at rv or above. Not an agent, seems like too much hard work working weekends and long hours for little reward, only 20% of them ever make it. Probably should go back to not giving a toss what others post, but find if frustrating when buyers come on here for advice over this last period of good buying and get told "your crazy for even thinking that" and possibly miss out.
Osty - you would have
Osty - you would have made a tidy capital gain since May!
Shuttle, expensive rental part of
Shuttle, expensive rental part of the country? No, I quite simply DON'T live in an over-inflated market like Auckland or Christchurch. I live in Dunedin. Our rent was $280 per week. $280 a week in interest at 6% gives you a mortgage of 240k that costs nothing. However, in fact our house is valued at $235k, which is slightly under the median here, and we bought it for $205k because we got in at the RIGHT time. Yes bank manager, we probably have made a capital gain already.
Oh, and in case anyone thinks we bought a dump, it is a nice 140m2 house with a 4-car garage, warm and in good condition with views of Otago harbour AND the sea. We absolutely love it.
veedub, you are absolutely correct. We are doing the same. We are paying off the mortgage as fast as we can right now while rates are low. We are only paying 5.35% currently.
Good on you Osty, that
Good on you Osty, that sounds like a nice set-up, and probably 30-40 k up? Dunedin is mint, good beaches and close to southern lakes, and our only castle :-)
Post new comment