Mortgage Rate hits 60 year low - What does that mean to you ?

[voltage]

yes, it is now tempting to gear into NZ dividend stocks. Maybe better than gearing into property in an overheated market. Out of interest, say you borrowed $200000 fixed for 5 years and spread over 5 blue chip dividend growth stocks who would be on the shopping list. My first pick would be AIA

[kiora]

yes, it is now tempting to gear into NZ dividend stocks. Maybe better than gearing into property in an overheated market. Out of interest, say you borrowed $200000 fixed for 5 years and spread over 5 blue chip dividend growth stocks who would be on the shopping list. My first pick would be AIA

Its a bit of a honey trap
http://www.dividendyield.co.nz/hightolowdividend.php
IFT,AIR,SKL,AIA,FPH all with good potential to grow earnings.Highest risk IMV might be AIR so could replace with SKC
Disc:Hold all except AIR

[kiora]

Interesting and sensible article
http://www.sharechat.co.nz/article/7...y+30+July+2015

[Beagle]

yes, it is now tempting to gear into NZ dividend stocks. Maybe better than gearing into property in an overheated market. Out of interest, say you borrowed $200000 fixed for 5 years and spread over 5 blue chip dividend growth stocks who would be on the shopping list. My first pick would be AIA

What I'm finding a little annoying is that while the BNZ is happy to lend on new business at a fixed rate of 4.69% my revolving home loan account, (and that's after my professional association discount), is still 5.8%.
Classic case of a preferred client discount not really being a discount !! Yes I understand revolving credit is always more expensive than fixed rate special deals but the difference illustrates the excessive margins banks are making on revolving credit facilities in my opinion. I'm not really tempted to gear-up at 5.8%...that's probably a good thing as if it was 3.99% I think I'd find it hard to resist.

[Aaron]

Leverage up I say, I want to see a little bit more irrational exuberance. Am I right in thinking that the NZX50 is at an all time high. I am waiting for the crash but my patience is wearing thin. We need to see people getting carried away and then getting spooked into an overreaction on the downside.
You never know low yields could be here to stay, as this time "I think it could be different". Where are you beautiful black swan I await your arrival with bated breath.

More seriously though the difference between your dividend yield and interest rate could get quickly lost by capital depreciation if we had a market crash. But if you have done your research I guess you can hold for the long term. I personally won't be leveraging up just yet.

[Beagle]

Leveraging makes more sense when you're younger as you have more time to recover from a disaster if the SHTF.

[Xerof]

I have forgotten where I read it, but one very good commentator recently observed, the last time NZ went into recession, interest rates and the currency were going up..

Seems a lesson was learned from that experience

sorry, one might think this a little obscure....I meant to just add that for the young and the restless, a bit of leverage might be appropriate if you can pick up some cheap funding.

And, I think the next local black swan might come from the RBNZ raising the risk weighting for their residential mortgages to dampen supply of cheap loans from the trading banks. It needs to be directed to the productive sector IMV

[RGR367]

The latest rate would just mean I wouldn't get charged an usurious rate on my margin lending with ASB later on. Hoping it could come down soon 'cuz it's still at 6.95% at the moment if I'm not mistaken.

[Beagle]

HSBC just came out with a new special of only 4.49% for 1, 2 or 3 years fixed. The trend downwards continues...

[dingoNZ]

I had a 2nd mortgage at 27.5% once with 1st mortgage over 20% and that was 'mates rates' from a super fund.

A 4% mortgage - unbelievable ......and the young still moan and complain

try scraping at 20% deposit together when you're young. Back when rates were that high banks were handing out money left, right and centre to anyone willing to take it. It takes a hell of a long time to get 20%, say lets call of $50k when you're fresh out of uni and working for $25 per hour. Not all the young have parents in a position to offer equity either