RBNZ intends to lift interest rates over the coming years, but held fire this time given the level of uncertainty about this new outbreak.read more
Business as usual.
SuperCity will continue to remain open and where necessary, we can easily work offsite. If you have a meeting booked and would prefer to do this online through a video call, we are more than happy to set this up for you – your health and wellbeing is our priority. We have always said we are here for you for all your mortgage and insurance requirements, so in uncertain times, this is where we want to prove this to you the most.
Interest rate outlook can change so quickly.
The other day the RBNZ kept the official cash rate on hold. The RBNZ’s statement was much in line with what we expected: it intends to lift interest rates over the coming years, but held fire this time given the level of uncertainty about this new outbreak.
Rates set to rise
Indeed, while the projected OCR track – which was likely adjusted to reflect this decision – still implied at least one rate hike by the end of this year, it’s too early to take any meaningful guidance from this as to the timing of the first move.
Experience shows that economic activity tends to bounce back readily when Covid restrictions are lifted. Once that happens, the RBNZ will be faced with much the same issues as before in terms of capacity constraints. The issue is the extent to which the lockdown acts as a handbrake on demand, which had otherwise been rapidly building momentum this year.
Fixed rates have been steadily increasing week on week, factoring in future moves. The RBNZ is signalling at least one rate rise by year end, all going well with the current Covid community outbreak. And the OCR is forecast to hit 2% by the end of 2023.
With interest rates set to rise regardless, it is a good time to remind you that you can lock in rates well before your existing rates expire. Some banks offer 60 days, 45 days and some 30 days. Bearing in mind, even if it is 90 days or more, you can always ask for a break fee quote. Given the rate rising market, often we are seeing very nominal fee’s being charged, if any at all. Get in touch to discuss this further and we can investigate this for you.
Banks get fiercely competitive.
Take one flat housing market. Add sub-4% interest rates. Stir in tight lending criteria. What do you get? Banks that are competing hard for quality borrowers. If you have a healthy amount of equity and a good income, expect to see excellent interest rate offers.
What are the banks saying?
And there’s more you can expect to be offered cash, too. It scales depending on how much you borrow, but a $500,000 loan switched to a new bank might attract $4,000 cash and a $1 million loan might get closer to $7,500 or more.
This competitive environment for lenders has also generated an innovative approach to changeover fees. One of the big barriers to switching banks is legal fees, which are typically around $800 and can be as high as $1,500. Kiwibank has introduced a free switching service where the bank pays your legal fees to move your loan for properties owned in personal names.
This is proving very appealing to our clients and many have switched banks as a result. It’s a game changer. We are one of just eight mortgage broker companies in NZ who can deal with Kiwibank. I think we can expect other banks to be weighing up whether they can follow suit – is this the beginning of a trend towards free bank changeovers?
Right now at SuperCity we’ve been doing a lot of reviews for our customers. I analyse your loan amounts, rates, repayments, structure and lender. Could you break your fixed term and save yourself a lot of money? Is another lender going to give you an outstanding deal? Can we restructure or split your lending to help you reduce your debt more quickly? It’s a quick and easy service, with no obligation to make any changes, so if you’d like to know more just drop me a note or give me a call. I’m here to help.
Personal insurances, now more important than ever.
For most people, their mortgage is likely to be their biggest financial commitment, which can also become their biggest stress if household income drops rapidly, typically from an illness, injury or redundancy.
Giving you peace of mind
This is an unprecedented time and personal insurance is a way of having that extra peace of mind. Typically, the main concerns of our clients are:
- Worries with potential increased health risks.
- Stress on meeting financial commitments in case of sudden illness for themselves/spouse and/or dependents.
- Anxiety about not being able to meet mortgage repayments, rent or living costs.
If you wish to discuss any concerns and explore your options, you may want to contact Jaime who looks after hundreds of our clients policies and my own personal insurance protection. Her contact details are below.
Managing Director, Principle Insurance Adviser
M 021 527 069
Level 26, HSBC Tower, 188 Quay Street, Auckland 1010
New comparable rate online calculator sets the standard.
The team at SuperCity has designed a new lending calculator on our website to help you compare borrowing and repayment options.
You can work out an interest-only loan, what your repayments would be on a top-up and also see what difference an extra payment would make to your loan term and interest costs.
An example of this is on an average sized mortgage of $500k, just $50 extra per fortnight in repayment could save you around $40k in interest over the term of the loan and reduce the term by two and half years.
I love this mortgage calculator – I haven’t seen a better one on any website. Try it out and let me know what you think.
As a valued client of SuperCity you have access to the following free services
- Advice & recommendationsWe are available to provide expert independent advice and recommendations for your home loan ongoing, all you need to do is email, txt or call either of us.
- Fixed rate home loan reviewsWe’ll help you get the best interest rate in the market for your home loan and contact you well before the bank does.
- Refinance optionsWe’ll help you refinance if you’re not happy with your current bank.
- Home loan top upsWe’ll help you top up your home loan if you need extra funds, for example, to pay for renovations on your home.
- Car loansWe’ll help you get that dream car or to refinance your existing car loan.
- Need help with your life and living insurances?We can connect you with our award winning Insurance Adviser, Jaime James to ensure you’re protected for the things that matter most, your health, family and the most important asset, your income.
- Personal insurancesIncluding home, contents, boats and cars.
- Need help with legal?We can connect you with a Solicitor to assist with the settlement of your home loan, setting up a Trust or for estate planning.
- Regular communicationWe’ll contact you regularly to ensure all is going well with your home loan and to keep you updated with any helpful tips and tricks.
Have a great day and we look forward to helping you achieve your financial goals and plans.
Up-to-date market news.See our archives to catch up on previous issues.
The announcement we did not expect: the removal of the ability of all new investor purchasers to deduct interest costs moving forward.read more
Although November will still likely show a sharp price increase, for December onward monthly price gains below the 3.5% of October and 2.6% of September are likely.read more