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Thread ID: 87936	2008-03-09 09:36:00	Mortgage advice??	nofam (9009)	PC World Chat

Post ID	Timestamp	Content	User
647691	2008-03-09 09:36:00	SWMBO and I are about to enter the big bad world of home ownership, so I thought I'd ask advice from the learned folks here about the pros & cons of fixed vs floating etc, and what you'd all do/are doing now in the face of rather high interest rates?? Thoughts, tips and general rantings & ravings gratefully accepted!! :D	nofam (9009)
647692	2008-03-09 09:59:00	Well if it was me I would wait until later in the year to buy a house. Prices have started to come down so they could drop a lot more by then and save you money.	CYaBro (73)
647693	2008-03-09 10:39:00	Not got a home loan yet .. but I have looked into it. My gut feeling is that house prices will not necessarily drop that much. Compare your current situation with it, how much do you gain/lose by getting a mortgage earlier or later .. is it about paying rent now vs a mortgage. NZ has a love of owning properties and I don't think that will change in anytime soon. If house prices stay relatively high as I don't see the house prices dropping 33%, I think that some people may start to target the lower and the upper price bands. I think there is gonna be a split than a overall drop of demand in housing. I dunno about the bank rates. My IMHO I think that the interest rate will be high for sometime so I may get the fixed rate. Fixed is fixed, if the rate increase or decrease you cannot unless you pay an amount in the contract to break away from. So it cuts both ways. If interest rate drop then you lose out, if it rise then you benefit. I think thou, fixed rate is a bit lower for that bit extra of uncertainty. I think a lot of it is a personal call. Compare scenarios. Buy now or later .. rent more or jump in etc. For a good family home in the big cities, 500k interest rate of near 10%, first week is $1,000 just the interest. But then you could buy smaller or apartments or townhouses or if more than 1 is working .. or if you got some cash stashed aside. I haven't done any calculations comparing rental vs owning say from tilt he age of retirement and plus 20/30yrs. The interest is quite a bit and it compounds. Renting you could have more cash stashed aside and that compounds into a +ve thing. Edit. The other 1/2 week ago I read up statistics on MERINZ or something and looked at the trends. There is a drop off in Jan and Feb maybe by 10,000 each month, one of the peak price was in Nov 2007 and it also had a high-ish demand as well. The best time to purchase was maybe 2001 much of the year or maybe various parts of 2003. Since then to now its really skyrocketed. I think if you have people who were willing to pay big dollars and in the high demands at that time there are plenty of demand to suppress any major drops in the property market. I cannot tell from the stats or didn't check, but my feeling is that demand is boyant, people may start to shift to lesser $$ properties, so its a shift rather than a turn off.	Nomad (952)
647694	2008-03-09 10:50:00	SWMBO and I are about to enter the big bad world of home ownership, so I thought I'd ask advice from the learned folks here about the pros & cons of fixed vs floating etc, and what you'd all do/are doing now in the face of rather high interest rates?? Thoughts, tips and general rantings & ravings gratefully accepted!! :D Fix it for 9-12 months. If there is a downturn in the economy (very likely) then the Reserve Banks will have no option but to cut interest rates because the Govt. cant increase its spending. Its already hits its limit.	beeswax34 (63)
647695	2008-03-09 19:14:00	Check out his site - a lot of NZ current interest rates (from banks etc...) and you can sort them from lowest to highest www.goodreturns.co.nz	jberries (13063)
647696	2008-03-09 22:08:00	Well if it was me I would wait until later in the year to buy a house. If you are into house buying as investments but if you just want something to live in and love then buy whenever you are ready. Long term, they always end up worth more than you paid and the mortgage goes away eventually. Rent just goes up and up. Depending on your finances get a broker, they can look around at deals.......but some banks won't use brokers.............in which case if you have a preference, try them too. I'd fix it for a year or 2. Look at it in the long term though. Our first house, the interest rates varied over 12 years from 6% too 11%.	pctek (84)
647697	2008-03-10 02:33:00	Fix it for 9-12 months. If there is a downturn in the economy (very likely) then the Reserve Banks will have no option but to cut interest rates because the Govt. cant increase its spending. Its already hits its limit. That won't nessessarily effect the rate the bank is charging, as banks are finding it more expensive to borrow at the moment. You should see how much you can afford to borrow, and work out what the interest rate would have to go up to before you couldn't afford to meet your payments. If you could only just scrape by now, then I would forget it for now, as the banks interest rates could go quite a bit higher yet. There are a lot of people getting out of housing now, because they didn't foresee interest rates raising, and they want to exit the market before the end of their current interest term is up. House prices in NZ are likely going to drop in the next 2 years for a number of reasons, so it is actually probably cheaper to rent for now and buy in a year to two. I have been told that house prices will remain static on average over the next 5 years, so what you are paying now, could be what you would pay in 5 years, so there will probably be little capital gain over this time.	robbyp (2751)
647698	2008-03-10 03:08:00	This site is probably not the best; www.propertytalk.co.nz is quite good. You could also consider splitting it between fixed and floating. If you get only fixed, you can only pay it back at a fixed rate; you can't pay it back any faster even if you had the money (Have I got that right...?) If you get floating (ie revolving credit), you can pay it off as fast as you comfortably can at your discretion, at the cost of a slightly higher rate. So what you could do is split the mortgage over both types. That way you get the benefit of paying off more than the fixed amount if you come into some extra cash, or are able to save a little extra, but you get a lower interest rate than if it were fully on floating. Whether you go for a half/half split or a different ratio will depend on your circumstances and your ability to service debt. *standard disclaimer: I'm not liable for anything you do, and this post does not constitute financial advice.	utopian201 (6245)
647699	2008-03-10 06:20:00	That won't nessessarily effect the rate the bank is charging, as banks are finding it more expensive to borrow at the moment. Right, so when the Reserve Bank does drop its rates if there is a downturn, so will the rates of all the ordinary banks.	beeswax34 (63)
647700	2008-03-10 08:03:00	Right, so when the Reserve Bank does drop its rates if there is a downturn, so will the rates of all the ordinary banks. The banks raised their interest rates just last week, yet the reserve bank hasn't raised the rates since last year, so what is the justification for that?. The reserve bank will only reduce the rates if inflation is under control, and they have already said that they don't see them easing for a long time. Australias rates are also raising and are almost as high as ours now.	robbyp (2751)
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