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

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11487606

I logged on to internet banking this morning and got a real surprise. Surely not !! 4.69% fixed for 2 years. I racked my early 50's year old brain, barely functioning first thing in the morning after only one coffee and despite all the rusty cogs only just starting to work for the week, I was pretty sure I'd never seen a rate this low in all my life and sure enough, it turns out I haven't.

Does this mean you'll spend more though or maybe gear up to make leveraged market investments ?
Curious what this means to you folks ?

Seems to me rates could go even lower, could it even be possible we'll see 3.99% by the end of this year ?

Surely at that sort of rate there's some mileage in taking a moderatly geared position to invest more in high dividend yield shares or are you a crusty old GFC survivor that's getting old and conservative like me and extremly reluctant to take a geared position in the market ?

Thoughts folks ?

[winner69]

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

[BIRMANBOY]

early days.......
Mortgage Rates by CountryAll TypesAuto LoanAuto LoansCar LoanEducation LoanEquity LoanFixedGold LoanHome LoanHousing LoanLoanMortgageMortgage LoanPersonal LoanPersonal LoansSecuredStudent LoanVariableHome Loan







Highest Rates by all banks (http://www.deposits.org/world-home-loans.html#)Lowest Rates by all banks (http://www.deposits.org/world-home-loans.html#)Best Rates by oldest Banks (http://www.deposits.org/world-home-loans.html#)Best Rates by largest Banks (http://www.deposits.org/world-home-loans.html#)

By Countries (http://www.deposits.org/world-home-loans.html)/By Banks (http://www.deposits.org/world-home-loan-banks.html)


Country

Inflation

GDP

Population

Interest Rate

Change

Currency

Last Updated



Switzerland (http://switzerland.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
0.4%
40,484
8,183,800
1.04%
-
CHF
Jun 2015


United Kingdom (http://uk.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2%
34,388
64,105,654
1.07%
-
GBP
Jul 2015


Taiwan (http://taiwan.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
1.6%
31,776
23,410,280
1.88% ~ 3.38%
-
TWD
Jul 2015


Netherlands (http://netherlands.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.3%
39,877
16,876,800
1.90%
-
EUR
Jul 2015


Sweden (http://sweden.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.5%
35,951
9,728,498
1.97%
-
SEK
Jul 2015


Hong Kong (http://hong-kong.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5%
45,277*
7,234,800
2.15%
-
HKD
Jul 2015


Canada (http://canada.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.8%
37,947
35,540,419
2.19%
-
CAD
Jul 2015


Norway (http://norway.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
1.9%
53,471
5,156,450
2.40%
-
NOK
Jul 2015


Singapore (http://singapore.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4.6%
50,180
5,469,700
2.5%
-
SGD
Jul 2015


Slovenia (http://slovenia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)

27,900
2,064,647
2.50%
-
EUR
Jul 2015


United States (http://us.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
1.5%
45,934
319,094,000
2.50%
-
USD
Jul 2015


Slovakia (http://slovakia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.9%
7,325
5,415,949
2.84%
-
EUR
Jul 2015


Germany (http://germany.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.2%
34,388
80,767,000
3.28%
-
EUR
Jul 2015


Ireland (http://ireland.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.4%
38,685
4,609,600
3.50%
-
EUR
Jul 2015


Chile (http://chile.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.3%
15,002
17,819,054
3.60% - 5.10%
▼
CLP
Jul 2015


Poland (http://poland.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4%
18,837*
38,496,000
4.05%
-
PLN
Jul 2015


Australia (http://australia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.4%
38,663
23,665,600
4.09%
-
AUD
Jul 2015


Austria (http://austria.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.3%
39,634
8,527,230
4.3%
-
EUR
Jul 2015


Qatar (http://qatar.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.8%
78,260
2,187,326
4.35%
-
QAR
Jul 2015


China (http://china.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5.4%
6,778
1,367,900,000
4.50%
-
RMB
Jul 2015


Fiji (http://fiji.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
8.6%
4,366
859,178
4.50%
-
FJD
Jul 2015


Panama (http://panama.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5.9%
14,097
3,713,312
4.75%
▼
USD
Jul 2015


New Zealand (http://nz.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4.5%
26,670
4,541,340
4.95%
▼
NZD
Jul 2015


Greece (http://greece.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.9%
29,663
10,992,589
5.25%
-
EUR
Jul 2015


Bulgaria (http://bulgaria.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4.2%
13,789
7,245,677
5.80%
-
BGN
Jul 2015


Philippines (http://philippines.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5.3%
3,546
100,553,900
6.00%
-
PHP
Jul 2015


Vietnam (http://vietnam.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
18.9%
2,942
89,708,900
6.49%
-
VND
Jul 2015


Bosnia (http://bosnia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)

8,127
3,791,622
7.85%
-
BAM
Jul 2015


Bahamas (http://bahamas.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
1.8%
31,324
368,390
9.00% - 10.5%
-
BSD
Jul 2015


Nepal (http://nepal.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
8.3%
1,200
27,646,053
9.00% - 10.50%
-
NPR
Jul 2015


South Africa (http://south-africa.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5%
10,229
54,002,000
9.25%
-
ZAR
Jul 2015


Jamaica (http://jamaica.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
9.4%
9,029
2,717,991
9.50%
-
JMD
Jul 2015


Solomon Islands (http://solomon-islands.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)

3,345
581,344
9.95%
-
SBD
Jul 2015


Georgia (http://georgia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
-0.5%
6,145
4,490,500
10.25%
-
GEL
Jun 2015


Malaysia (http://malaysia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.3%
13,800
30,401,400
10.50%
-
MYR
Jul 2015


Indonesia (http://indonesia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5.7%
4,151
252,164,800
11.00%
-
IDR
Jul 2015


Maldives (http://maldives.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)

9,173
341,848
11.00%
-
MVR
Jul 2015


Sri Lanka (http://sri-lanka.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
7.7%
5,220
20,277,597
11.00%-12.50%
-
LKR
Jul 2015


India (http://india.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
6.8%
3,275
1,262,530,000
11.75%
-
INR
Jul 2015


Thailand (http://thailand.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4.1%
8,051
64,871,000
12.00%
-
THB
Jul 2015


Bangladesh (http://bangladesh.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
10.7%
1,565
157,322,000
13.00%
-
BDT
Jul 2015


Russia (http://russia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
8.9%
14,913
146,149,200
14.25%
-
RUB
May 2015


Turkey (http://turkey.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
7.8%
13,905
76,667,864
15.48%
▲
TRY
Jul 2015


Zimbabwe (http://zimbabwe.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
8.3%
559
13,061,239
18.50%
-
USD
Jul 2015


Ukraine (http://ukraine.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
9%
6,665*
42,977,367
22.30%
-
UAH
Jul 2015

[Xerof]

I had a 1st at 23.5%, in the late 80's/early 90's but the house only cost 425k. Servicing was actually quite comfy at around 30% or so of income, but int only IIRC

the youngish might get it at 4.69, but they need to pass a stress test of a notional 7+ don't they? If they don't, they should! When rates go back up, the fireworks begin......

And the equivalent price today of my property then would be well over a mill. salaries ain't that much higher either, really

Roger, re leverage - crusty old survivor of 87 and 08. Have only leveraged FX with limited success, but wouldn't bother on equities

so, means nothing to me except lousy savings rates for surplus cash

[kiora]

early days.......
Mortgage Rates by CountryAll TypesAuto LoanAuto LoansCar LoanEducation LoanEquity LoanFixedGold LoanHome LoanHousing LoanLoanMortgageMortgage LoanPersonal LoanPersonal LoansSecuredStudent LoanVariableHome Loan







Highest Rates by all banks (http://www.deposits.org/world-home-loans.html#)Lowest Rates by all banks (http://www.deposits.org/world-home-loans.html#)Best Rates by oldest Banks (http://www.deposits.org/world-home-loans.html#)Best Rates by largest Banks (http://www.deposits.org/world-home-loans.html#)

By Countries (http://www.deposits.org/world-home-loans.html)/By Banks (http://www.deposits.org/world-home-loan-banks.html)


Country

Inflation

GDP

Population

Interest Rate

Change

Currency

Last Updated



Switzerland (http://switzerland.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
0.4%
40,484
8,183,800
1.04%
-
CHF
Jun 2015


United Kingdom (http://uk.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2%
34,388
64,105,654
1.07%
-
GBP
Jul 2015


Taiwan (http://taiwan.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
1.6%
31,776
23,410,280
1.88% ~ 3.38%
-
TWD
Jul 2015


Netherlands (http://netherlands.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.3%
39,877
16,876,800
1.90%
-
EUR
Jul 2015


Sweden (http://sweden.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.5%
35,951
9,728,498
1.97%
-
SEK
Jul 2015


Hong Kong (http://hong-kong.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5%
45,277*
7,234,800
2.15%
-
HKD
Jul 2015


Canada (http://canada.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.8%
37,947
35,540,419
2.19%
-
CAD
Jul 2015


Norway (http://norway.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
1.9%
53,471
5,156,450
2.40%
-
NOK
Jul 2015


Singapore (http://singapore.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4.6%
50,180
5,469,700
2.5%
-
SGD
Jul 2015


Slovenia (http://slovenia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)

27,900
2,064,647
2.50%
-
EUR
Jul 2015


United States (http://us.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
1.5%
45,934
319,094,000
2.50%
-
USD
Jul 2015


Slovakia (http://slovakia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.9%
7,325
5,415,949
2.84%
-
EUR
Jul 2015


Germany (http://germany.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.2%
34,388
80,767,000
3.28%
-
EUR
Jul 2015


Ireland (http://ireland.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.4%
38,685
4,609,600
3.50%
-
EUR
Jul 2015


Chile (http://chile.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.3%
15,002
17,819,054
3.60% - 5.10%
▼
CLP
Jul 2015


Poland (http://poland.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4%
18,837*
38,496,000
4.05%
-
PLN
Jul 2015


Australia (http://australia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.4%
38,663
23,665,600
4.09%
-
AUD
Jul 2015


Austria (http://austria.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.3%
39,634
8,527,230
4.3%
-
EUR
Jul 2015


Qatar (http://qatar.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.8%
78,260
2,187,326
4.35%
-
QAR
Jul 2015


China (http://china.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5.4%
6,778
1,367,900,000
4.50%
-
RMB
Jul 2015


Fiji (http://fiji.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
8.6%
4,366
859,178
4.50%
-
FJD
Jul 2015


Panama (http://panama.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5.9%
14,097
3,713,312
4.75%
▼
USD
Jul 2015


New Zealand (http://nz.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4.5%
26,670
4,541,340
4.95%
▼
NZD
Jul 2015


Greece (http://greece.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
2.9%
29,663
10,992,589
5.25%
-
EUR
Jul 2015


Bulgaria (http://bulgaria.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4.2%
13,789
7,245,677
5.80%
-
BGN
Jul 2015


Philippines (http://philippines.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5.3%
3,546
100,553,900
6.00%
-
PHP
Jul 2015


Vietnam (http://vietnam.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
18.9%
2,942
89,708,900
6.49%
-
VND
Jul 2015


Bosnia (http://bosnia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)

8,127
3,791,622
7.85%
-
BAM
Jul 2015


Bahamas (http://bahamas.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
1.8%
31,324
368,390
9.00% - 10.5%
-
BSD
Jul 2015


Nepal (http://nepal.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
8.3%
1,200
27,646,053
9.00% - 10.50%
-
NPR
Jul 2015


South Africa (http://south-africa.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5%
10,229
54,002,000
9.25%
-
ZAR
Jul 2015


Jamaica (http://jamaica.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
9.4%
9,029
2,717,991
9.50%
-
JMD
Jul 2015


Solomon Islands (http://solomon-islands.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)

3,345
581,344
9.95%
-
SBD
Jul 2015


Georgia (http://georgia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
-0.5%
6,145
4,490,500
10.25%
-
GEL
Jun 2015


Malaysia (http://malaysia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
3.3%
13,800
30,401,400
10.50%
-
MYR
Jul 2015


Indonesia (http://indonesia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
5.7%
4,151
252,164,800
11.00%
-
IDR
Jul 2015


Maldives (http://maldives.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)

9,173
341,848
11.00%
-
MVR
Jul 2015


Sri Lanka (http://sri-lanka.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
7.7%
5,220
20,277,597
11.00%-12.50%
-
LKR
Jul 2015


India (http://india.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
6.8%
3,275
1,262,530,000
11.75%
-
INR
Jul 2015


Thailand (http://thailand.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
4.1%
8,051
64,871,000
12.00%
-
THB
Jul 2015


Bangladesh (http://bangladesh.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
10.7%
1,565
157,322,000
13.00%
-
BDT
Jul 2015


Russia (http://russia.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
8.9%
14,913
146,149,200
14.25%
-
RUB
May 2015


Turkey (http://turkey.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
7.8%
13,905
76,667,864
15.48%
▲
TRY
Jul 2015


Zimbabwe (http://zimbabwe.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
8.3%
559
13,061,239
18.50%
-
USD
Jul 2015


Ukraine (http://ukraine.deposits.org/)+Follow (http://www.deposits.org/world-home-loans.html#)
9%
6,665*
42,977,367
22.30%
-
UAH
Jul 2015



From tradingeconomics
New Zealand Inflation Rate 1918-2015 | Data | Chart | Calendar | Forecast
The inflation rate in New Zealand was recorded at 0.30 percent in the second quarter of 2015. Inflation Rate in New Zealand averaged 4.80 percent from 1918 until 2015, reaching an all time high of 44 percent in the third quarter of 1918 and a record low of -15.30 percent in the first quarter of 1923. Inflation Rate in New Zealand is reported by the Statistics New Zealand.
But now 2% for tradeable goods
So shouldn't interest rates should be more like 2.5 % ?
Maybe time to borrow more :) and let the dividends pay the interest bill

[Beagle]

I had a 1st at 23.5%, in the late 80's/early 90's but the house only cost 425k. Servicing was actually quite comfy at around 30% or so of income, but int only IIRC

the youngish might get it at 4.69, but they need to pass a stress test of a notional 7+ don't they? If they don't, they should! When rates go back up, the fireworks begin......

And the equivalent price today of my property then would be well over a mill. salaries ain't that much higher either, really

Roger, re leverage - crusty old survivor of 87 and 08. Have only leveraged FX with limited success, but wouldn't bother on equities

so, means nothing to me except lousy savings rates for surplus cash

Yeah me too mate but 3.99% fixed for 5 years might have me re-thinking my investment strategy a bit.

[Harvey Specter]

What does it mean for me? It means I am a bit annoyed I locked in a portion of my loan about 6 months ago. And annoyed that they still charge such a high margin on float rates. Both in the high 5s while people are sub 5% annoys me.

[macduffy]

What does it mean for me? It means I am a bit annoyed I locked in a portion of my loan about 6 months ago. And annoyed that they still charge such a high margin on float rates. Both in the high 5s while people are sub 5% annoys me.

And I'm a bit annoyed because it means less interest income for me from the cash part of my portfolio and a greater incentive to top up on dividend-paying equities!

;)

[iceman]

Yeah me too mate but 3.99% fixed for 5 years might have me re-thinking my investment strategy a bit.

I think you have answered your original question !! I would think many will be thinking along similar lines as we have many stocks on the NZX that pay steady ad fairly safe dividends well above that rate

[LAC]

Its also nerve wrecking if your mortgage fixed term is ending soon and you know the rates are going to drop further but the floating is way too high to leave it on there and the fixed is good for a 1 year+. Anyone neg. with their bank for a sub 5 for 6mths? If so, which bank?

[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/742dcea5/investors-go-through-nine-market-cycles-throughout-their-lifetime-russell-research-shows.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Thursday+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

[winner69]

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

Banks weren't that generous in my days either. Thus most of use had 2 or 3 mortgages.

We scrapped the bottom of the barrel to get a deposit as well and sacrificed a lot for a few years, like no car.

Anyway most of us have bad times eh.

The moan comment was about those who complain that a 5% rate is outrageous. Just putting things in (historical) context.

Best of luck with your putting together a deposit.

[Beagle]

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

Fact is its never been easy to own a house in Auckland. I needed 20% back in 1991, actually $30,000 on my first house which cost $128,000.
I saved $10,000 a year for 3 years. The FIRST $200 I earned each week went into a home loan savings account. I lived a very, very frugal lifestyle of the rest of what I earned. Stripped just about every single item of discretionary spending out of my budget, (booze, entertainment, travel, were simply not options, a very cheap crappy car which I drove the minimum possible distance, and lived like a frugal monk for 3 whole years. Worked part time from home doing accounting jobs too as well as my full time salaried position.

A few weeks ago I saw a three bedroom basic starter home in Papakura for $399,000. 1960's weatherboard with 1960's décor. Perfect starter home I thought for someone. Trouble with young people today is they don't want to start at the bottom of the ladder, I know because we tried to help one of our daughters get into a basic 2 bedroom flat in West Auckland and she and her boyfriend turned their noses up at it, apparent a basic 1960's or 1970's 2 bedroom flat in a very modest suburb with dated décor isn't good enough these days !! Whatever happened to getting in at the bottom and rolling your sleeves up and using some hard work to do it up and make a profit ?

[macduffy]

This is starting to sound like something from the Monty Python show or somesuch - "Do you think that's hard! We lived in a paper bag!"

But seriously, it was just as hard to find four thousand pounds ($8,000) in the mid 1960's for a deposit on a $28,000 house - if you could qualify for a loan. The difference was that full employment was the norm and moonlighting part-time work was much easier to find.

[stoploss]

Fact is its never been easy to own a house in Auckland. I needed 20% back in 1991, actually $30,000 on my first house which cost $128,000.
I saved $10,000 a year for 3 years. The FIRST $200 I earned each week went into a home loan savings account. I lived a very, very frugal lifestyle of the rest of what I earned. Stripped just about every single item of discretionary spending out of my budget, (booze, entertainment, travel, were simply not options, a very cheap crappy car which I drove the minimum possible distance, and lived like a frugal monk for 3 whole years. Worked part time from home doing accounting jobs too as well as my full time salaried position.

A few weeks ago I saw a three bedroom basic starter home in Papakura for $399,000. 1960's weatherboard with 1960's décor. Perfect starter home I thought for someone. Trouble with young people today is they don't want to start at the bottom of the ladder, I know because we tried to help one of our daughters get into a basic 2 bedroom flat in West Auckland and she and her boyfriend turned their noses up at it, apparent a basic 1960's or 1970's 2 bedroom flat in a very modest suburb with dated décor isn't good enough these days !! Whatever happened to getting in at the bottom and rolling your sleeves up and using some hard work to do it up and make a profit ?

Was nothing wrong with the flat Rog , she just didn't want to be a Westie !!!

[axe]

[QUOTE=Roger;584106] Stripped just about every single item of discretionary spending out of my budget, (booze, entertainment, travel, were simply not options, a very cheap crappy car which I drove the minimum possible distance, and lived like a frugal monk for 3 whole years. Worked part time from home doing accounting jobs too as well as my full time salaried position.

The younger generations (which I am part of) suffer from an entitlement syndrome.
We expect to be able to afford all of the luxury discretionary purchases and afford a house too.
Why should we have to make personal sacrifices to our lifestyles and cut back on our luxuries to be able to afford a house? The house should just be cheaper. The government should step in and make it cheaper for me.

[Beagle]

[QUOTE=Roger;584106] Stripped just about every single item of discretionary spending out of my budget, (booze, entertainment, travel, were simply not options, a very cheap crappy car which I drove the minimum possible distance, and lived like a frugal monk for 3 whole years. Worked part time from home doing accounting jobs too as well as my full time salaried position.

The younger generations (which I am part of) suffer from an entitlement syndrome.
We expect to be able to afford all of the luxury discretionary purchases and afford a house too.
Why should we have to make personal sacrifices to our lifestyles and cut back on our luxuries to be able to afford a house? The house should just be cheaper. The government should step in and make it cheaper for me.

It is refreshing to hear that coming from a GenY. To be fair though I do think it perhaps APPEARS to be a bit harder now relative to income. Back in 1991 the average house in Auckland was 5 times the average household income, (according to the department of statistics), now its more like 8 times. That said, my first home was bought with a mortgage at 15.5% whereas as I've noted above its now possible to borrow for 3 years fixed for as little as 4.49% !!!!!
I think taking into account the prevailing extremely low interest rates its probably no really any harder to get in at the bottom than it was.

LOL Stoploss - nothing could be further from the truth..she's a real Tom Boy that one :)

[kiora]

Whats everyone picking for morgage interest rates in the next 1-2 years ?
https://www.interest.co.nz/business/77013/westpac-expects-nz-economy-weaken-until-2020-hit-low-dairy-prices-canterbury-rebuild
I'm picking 4.5 % due to increasing unemployment.
Maybe lower ?

[Beagle]

3.99% and the bank will tell you Kiora when you uplift your mortgage because nobody will be borrowing as the economy is in recession...you read it here first :) Don't listen to the Government propaganda that we're all right Jack....they're just trying to talk us out of the inevitable. Mortgagee sales on dairy farms coming left right and centre...front page news of the Herald today and this is just the very beginning of it.

[Beagle]

Well we're edging closer to the magic 3.99%, a rate of 4.35% in the market now and the Reserve bank will drop the cash rate tomorrow as sure as the sun rises so we are on our way...only a matter of time before one of the banks steals a marketing coup on the others and goes down there.

[Beagle]

And there we have it. Two banks now offering 3.99% mortgage finance as predicted. Shame its just for residential owner occupied homes as some of the dairy farmers could really do with the help from ultra low rates like that.

So is it finally time to gear up and borrow at 3.99% for "home renovations" (that's what you tell your bank to get the ultra low rate), but it happens to find its way into the share market in high yielding stocks paying 8% gross divvies or more ?