TSB will make its new deal available to customers from today.
The move is the biggest in the latest round of interest-rate cuts and has prompted a debate about whether home-buyers are better off with fixed or floating mortgages.
The 10-year fixed rate will be 5.89 per cent for residential and investment property loans. A minimum deposit of 20 per cent is required.
– http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11397379The 5 year fixed mortgages in Australia are too high for us to consider them but we locked in a 30 year for our NY apartment at 4%
Easy decision at that rate (though keep in mind some of our friends are paying a lot less for the next few years eg we could be paying $750 less a month by being on variable……).
I don’t know what New Zealand is doing but 5.8% comparatively seems reasonable considering variable market rates going to be below this for the next 2-3 years and above that afterwards once we exit the GFC…… (yes yes….we could enter another one just as likely…)
I don’t know the ins and outs of NZ mortgages so not sure fixed rate works the same way it does here is Aus but for the purpose of my response I’ll assume it does.
A lot can happen in 10 years both personally and economically. The break fees for a 10 year loan could be horrendous. I’d feel uncomfortable locking something in for 5 years, but that is just me, as I know my circumstances don’t usually stay stationary.
Banks are in it to make money so taking a loan for that long is like betting against the house but it does give a lot of risk adverse people that SANF.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
The loan is portable (the article doesn’t go into any restrictions around this) but why else wouldn’t people feel comfortable locking this in? the rate doesn’t seem to be that much higher than the market average (eg on par with 3-5 year).
Seems a great way to lock in stability.
IN Aus you can get 10 and 15 years fixed rate with the big banks..it’s just not common…in fact i think i have only ever written ONE 15 years fixed rate and it was for a non-resident as well.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi Mic, Yes, I have done a few 7 & 10 year fixed rate loans but to property investors who where heading overseas for extended periods. I think Australians are happy to take a bit of a gamble on interest rate because they believe rightly or wrongly that in the long run variable interest rates will average out lower than the comparable fixed rate.
Albert Waldron | Awesome Lending Solutions
http://www.awesomelendingsolutions.com.au
Email Me | Phone MeTailored solutions to build wealth through property
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