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  1. #81
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    Holy hell! Can someone please explain to me why we can't fix longer than 5 years in New Zealand?

  2. #82
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    You're probably right. The RBA just recently introduced a new measure targeting a 0.25% yield on 3-year govt bonds in Aus, since it ran out of room with the cash rate (0.25%).

  3. #83
    Senior Member Entrep's Avatar
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    Anyone thinking of fixing some debt at 2.99% for 5 years? Had it not been for the recent announcement it seemed certain the RBNZ would raise in May (and the market would price it in sooner) making the 5 year 2.99% rate a steal. Now I am not so sure. Any thoughts appreciated.

  4. #84
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    Quote Originally Posted by Entrep View Post
    Anyone thinking of fixing some debt at 2.99% for 5 years? Had it not been for the recent announcement it seemed certain the RBNZ would raise in May (and the market would price it in sooner) making the 5 year 2.99% rate a steal. Now I am not so sure. Any thoughts appreciated.
    With the recent GDP result I can't see the RBNZ tightening anytime soon .
    Personally I think 2.99% is cheap money for 5 years and if it means you sleep at night that's a good thing.( as long as you not selling etc soon as potentially subject to a break fee)
    Short rates likely stay down here for a while but can see the 3-5 year tenors move up as international bond rates move up.
    I think of it this way if you fix in for 5 years at 2.99% think of it as a bit of an insurance policy .
    If the rate goes down to 2.49 % its a couple of coffees a fortnight ( depending upon your amount) However if rates went back to 5 % , can you afford that or would that be a big hit to
    your budget that you would be gutted about having to pay ?
    If your house doesn't burn down you are not gutted about the insurance premium you paid are you , it means you sleep at night and know your ( likely) biggest asset is covered .
    Personally I think it's a good idea to have a few tranches and have some locked in longer.

  5. #85
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    Quote Originally Posted by Entrep View Post
    Anyone thinking of fixing some debt at 2.99% for 5 years? Had it not been for the recent announcement it seemed certain the RBNZ would raise in May (and the market would price it in sooner) making the 5 year 2.99% rate a steal. Now I am not so sure. Any thoughts appreciated.
    Yep I did, I literally fixed a stack of my loans @ 5 years earlier this month, although I am playing the field - roughly 50/50 with the rest on floating.

    I've been hovering over the trigger on 5 years fixed for approximately 7 months now and figured it was time to lock something in to hedge my bets.

  6. #86
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    I think there are some signs from offshore that long term rates are under pressure to go higher and have already done so. But the Fed is fighting this and has stated they will do whatever they need to do to keep rates low. I think we need to remember the phrase "don't fight the Fed" (Martin Zweig, "Winning on Wall Street").

    Here in NZ we have the RBNZ which has more influence on short term rates equally hell bent on keeping rates low. The trading banks had spare cash on deposit with the RB of $16.3 B in February 2020. In February 2021, this amount had increased to $63.6 B. In that time the RB has printed $48 B so only $ 300M of it has gone into circulation, the rest is sitting at the RB earning the trading banks 0.25%.
    At the same time the banks currently have something like $66B more on short term deposit than they had forecasted.

    Based on this, I just can not see rates increasing anytime soon and despite thinking long and hard about moving some borrowings to 5 year terms, I can't bring myself to do it and will be renewing any upcoming fixed terms for 12 months.

  7. #87
    Senior Member Entrep's Avatar
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    Thanks everyone, yes I am of the mind that anything 5.x% and lower is a steal (from a historical perspective) and 2.99% at 5 years would certainly provide some certainty/insurance. It's also only about 25% of my lending I am talking about (the rest on a 12 month term due to come off in around 6 months).

    Also, I can't see rates going down any further - can anyone else? The 0.7% difference is so miniscule (on a historic basis too) that 5 years seems sensible for at least some of the lending.

    Only thing holding me back is I have been burned fixing for long periods before over the last several years (ie as rates have just kept coming down) but the bottom does seem well and truly in on longer terms anyway.

  8. #88
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    Quote Originally Posted by Entrep View Post
    Thanks everyone, yes I am of the mind that anything 5.x% and lower is a steal (from a historical perspective) and 2.99% at 5 years would certainly provide some certainty/insurance. It's also only about 25% of my lending I am talking about (the rest on a 12 month term due to come off in around 6 months).

    Also, I can't see rates going down any further - can anyone else? The 0.7% difference is so miniscule (on a historic basis too) that 5 years seems sensible for at least some of the lending.

    Only thing holding me back is I have been burned fixing for long periods before over the last several years (ie as rates have just kept coming down) but the bottom does seem well and truly in on longer terms anyway.
    If the GDP keeps being a shocker,and there are unintended consequences for the economy from this weeks move by the Govt who knows ? I always thought we would see main bank 1.99% for a year . I think landlords that are new to the game and where the margins are tight will look to increase rents ..... so begs the question does the Govt go a step further and bring in rent control, after this weeks move you can't really rule anything out.

  9. #89
    Senior Member Entrep's Avatar
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    Long term rates moving up https://interest.co.nz/personal-fina...nd-raised-some

    2.99% at 5 years was a steal

  10. #90
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    Quote Originally Posted by Entrep View Post
    Long term rates moving up https://interest.co.nz/personal-fina...nd-raised-some

    2.99% at 5 years was a steal
    Yep, it really was a steal and I'm glad I locked such a large portion in at this rate last month.

  11. #91
    Senior Member Entrep's Avatar
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    Quote Originally Posted by Norwest View Post
    Yep, it really was a steal and I'm glad I locked such a large portion in at this rate last month.
    I managed to get in the nick of time too. Stress free for 5 years whatever happens
    Last edited by Entrep; 12-05-2021 at 11:41 PM.

  12. #92
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    Anyone know why ANZ won't offer a competitive rate for 5 yr?

    Not only am I fixed for 5 yrs but I'm short the 90 day bank bills.

  13. #93
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    Quote Originally Posted by smpl View Post
    Anyone know why ANZ won't offer a competitive rate for 5 yr?

    Not only am I fixed for 5 yrs but I'm short the 90 day bank bills.
    What are they offering you ?
    Note they all pushed the 3-5 year rates up slightly recently and reduced the 1 year .

  14. #94
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    3.59% and that was in mid-March before the long end went up and when the median rate offered across all banks was 2.99%. Now the median rate is around 3.3% and I'm assuming their rate will be the same if not higher. I argued that other banks (ASB) could do better and they would not improve their price which is what they've usually done in the past.
    Last edited by smpl; 11-05-2021 at 08:06 PM. Reason: i wanted to add more

  15. #95
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    Quote Originally Posted by smpl View Post
    3.59% and that was in mid-March before the long end went up and when the median rate offered across all banks was 2.99%. Now the median rate is around 3.3% and I'm assuming their rate will be the same if not higher. I argued that other banks (ASB) could do better and they would not improve their price which is what they've usually done in the past.
    I think the rules prevent me from advertising , but send me a PM if you would like me to help. ( at no cost to you )

  16. #96
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    Quote Originally Posted by smpl View Post
    Anyone know why ANZ won't offer a competitive rate for 5 yr?

    Not only am I fixed for 5 yrs but I'm short the 90 day bank bills.
    They're 100% calling your bluff that you won't move... every second person threatens that now days and hardly any of them move.

    Banks are a lot more stringent around matching compared to what they have been in the past.

    There is a "negotiated rate" senior bank managers can offer, anything more requires their managers approval and they deal with big figures every day - your application was likely only given a passing glance - if it even got to that level.

    If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.

  17. #97
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    stoploss: I sent you a message.

    Norwest: I was told that I don't have a bank manager any more. I did state that I would move to another bank and even that wasn't enough to get them to negotiate. If If I do start the process with another bank, do you think there is a chance they will reach out to me instead?

  18. #98
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    Quote Originally Posted by smpl View Post
    3.59% and that was in mid-March before the long end went up and when the median rate offered across all banks was 2.99%. Now the median rate is around 3.3% and I'm assuming their rate will be the same if not higher. I argued that other banks (ASB) could do better and they would not improve their price which is what they've usually done in the past.
    I had something similar with ANZ ... they got me with sharp 1yr fixed rate + 5k Cash(from ASB) .. then when it came up for re-financing they wouldn't match the better rates advertised elsewhere ... I called their bluff and moved to Westpac .... so far so good WP have been pretty darn good to deal with ... will be re-financing again next month ... I see SBS 1yr fixed term 2.19% ... will be pushing to see WP match this rate plus some cash to stay (have had a couple of payments to date to stay)

    Have only been 1yr Fixing for many years ... I personal don't see high rates coming anytime soon ... far too much debt held by the masses would break the system if seen a spike higher .. personally think banks pushing up the longer end a pure play to get debt holders to sign up for longer rates ... I wouldn't be surprised if we don't see short term rates above 3% this decade its just the way the western world has all gone japanese ...
    Last edited by JBmurc; 11-05-2021 at 11:29 PM.
    People don't have ideas, ideas have people

  19. #99
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    Quote Originally Posted by smpl View Post
    Norwest: I was told that I don't have a bank manager any more. I did state that I would move to another bank and even that wasn't enough to get them to negotiate. If If I do start the process with another bank, do you think there is a chance they will reach out to me instead?
    Ultimately it depends on how much cash you have tied up with them (loans, businesses, insurances, cash etc) whether they will offer you a personal manager or not.

  20. #100
    FEAR n GREED JBmurc's Avatar
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    Great to see Heartland bank floating rate to 1.95% p.a. and 1-year fixed to 1.85% p.a. .... hope this puts some more pressure on the likes of Westpac to lower rates
    People don't have ideas, ideas have people

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