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So. What am I supposed to feel about reputably the best rates offers made since the second world war being offered to me now? If you are not aware, the Major banks are currently offering Mortgage rates of less than 4% for short fixed terms announced by a front page spread in the NZ Herald at the beginning of November. Should I be excited about this?
First thing to consider is that these rates will only be offered for a short time. Suggestions are that the offers will cease at the beginning of December. But below 4% is not new. Specialist lenders who have investment features to their businesses have been offering even better rates than these for a while now. However, there are qualifying requirements before you get offered these special rates including having significant amounts invested with them first.
So, these great rates are more about an announcement than particularly special. Don’t get me wrong, they are very good rates. However, rates change, they go up – and down and who’s to say that 2019 won’t see even better rates offered than these? The second thing to consider is can I take advantage of the offer currently. To know this, you need to be aware of your current interest rates and the cessation of your current term if you are on a fixed rate. If you are on a fixed rate, then you need to know what the break cost would be to break the current agreement. In which case you need to contact your bank and ask them. Thirdly, will it be that great an improvement to my current cashflow the difference between the new rate and your old rate.
Effectively, you need to do your sums. Before you leap, look. Do the maths and if your need help doing that then contact me to discuss all your options.