Keeping repayments higher than required can help you "be mortgage free" quicker. Most New Zealanders never want to go through another recesession with such significant amounts of debt. The habit of living off capital gain on your home and just topping up the mortgage from time to time no longer works. Banks have tightened their credit policy and are now often reluctant to lend beyond 80%.
The bubble has also really burst on the theory of buying 5 - 10 rentals and letting the IRD pay off the loan. Claiming depreciation looks to be a thing of the past. There has been some significant changes in this area over recent months and you should seek advice from an Accountant.
So why would you go on to a floating rate and should you refinance to a new lender to chase the best deal?
The answer is yes and no!!!
There are banks trying to buy business right now with low floating rates, but the trade off can be poor ongoing service and once they have you, they can may make you pay. For example, as we all know rates will rise, are they then going to catch you with fees when you want to change to a fixed rate mortgage? Who will you turn to when you want advice on whether to fix or split for 12, 24, 36 months or longer?
We have a large number of clients who will always ring us at the time of a fixed rate expiry, as we are often successfull at having their Bank discount the rates that are being quoted as "public" or "carded" rates.
Our Company has a policy of "advice for life" and this is for the life of your mortgage. We do not have offshore call centres, talking computers or priority queues. It may be old fashioned, but we use a system where you speak to a person and if they are busy you leave a message and we do call you back!
So if you value advice on fixed and floating rates, you need to talk to us first, we can also then see if you want to take advantgage of debt reduction coaching that can help you be mortgage free.
Contact us for more information
or Freephone 0800 699436 (0800 OXYGEN)