Westpac NZ cuts five-year mortgage rate giving it the lowest advertised rate for that term from a bank, also cuts savings rates

But that would involve taking on some level of risk - a horrible four letter word for most here. Particularly with economic armageddon on our doorstep.

Where?
Most people consider banks(rightly or wrongly) to be very safe.Outside of that options for many are few.
Oh i know...........HOUSES.

You mean to a different bank because these guys look a bit shaky?

Thanks Andrewj.

I said it a few months ago and the 'flip flopping' from their spokespeople over the last few months has done nothing to provide me with a change of opinion. They still remain my favourite candidate for being the first bank to make a trip the government for a hand-out.

I'd agree with them, and if i was that risk adverse; to avoid the OBR risk, and to stop giving them money to lend out to perpetuate the housing ponzi, I'd probably put my money in Govt bonds, either directly, or a govt bond ETF like the SPDR S&P/ASX Australian Bond Fund. Or choose a local infrastructure/utility that has bonds on issue like Meridian.

RP
While I find your comments about how excessive credit and how banks have channelled that to real estate, has inflated property values in an unsustainable (or even if it is sustainable then it is still unproductive and not beneficial to the society in any form) convincing, I find it distasteful that you have closed any disagreement with your opinion on bank deposit as it being from "mortgagor".
In a country where banks lending is primarily to residential properties, the argument between real estate VS bank deposit is pointless in my opinion. And bank depositors are investing in the ponzi, just not getting the same returns as mortgagor. So if the argument is from the point of view of "risk and return", the mortgagor (as you call them) have already won the battle (except for those who are extremely greedy and stupid and over leveraged), even if property values reduce.
However if your argument is how participation in this activity is counter-productive to NZ society and this nation's future, then the answer is surely not to deposit money in the banks who will just inject it into property. As far as risk-free goes, all finance models consider government bonds to be the definition of risk free.

Floating and loyal are seen as mutually exclusive to the banks. You are only "loyal" if you are bonded through a fixed mortgage.

The lower fixed term rates are the carrot and the high floating rate is the stick.

You are paying 4.25% interest to earn a 3.5% return. Ask yourself.

Well I had the same dilemma few years back and sorted it out ... works well for my risk profile.

These additional funds should be put to work to earn much more than 4.25% pa hence If you don't want to take more risk and park them in TD or saving account, then better to payoff debt.

There are many Growth fund managers who would get you at least 7% net return and some go as high as 12 % pa depending on how conservative you are.

In general, it depends on your age and your securities or contingency plans you have in place should markets had a sharp drop or turn, but until then most of the good fund managers should be able to secure your gains.

It is worth doing a bit of your own research instead of relying on examples other people used .... however, Russell Investments, Milford Asset management, Fisher Funds, AMP, and Forsyth Barr Investment Management are few places to start.

You can always payback some loans if it makes you feel better, but why pay a loan when you can use the money profitably?
Why pay back a loan that is much difficult to get nowadays?

hope this helps - good luck