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
News for homeowners and mortgage holders.
Interest rates have come down to record lows following the Reserve Bank dropping the official cash rate to an all-time low of 0.25%. The Government and banks have also agreed to give impacted mortgage holders a six-month payment holiday on both the interest and principal of their mortgages.
What is a mortgage holiday?
Be wary though, there is no such thing as a holiday. It’s actually a deferment where the money will either be added to your outstanding balance or your mortgage term will be extended.
A better option could be for you to apply for a period of interest only payments on your mortgage. The benefit of this is the balance of your mortgage will still be the same as it is today at the end of the interest only period.
Let’s compare the two. On a $300,000 mortgage with a 30 year term at a previous average interest rate of 3.45%, your monthly repayments would be $1339 per month.
If you took a Repayment Holiday for 6 months, the principle portion would cease and the interest portion ($862.50 per month) would continue to be calculated and then added to your balance which would be $305,175 at the end of the 6 months.
If you took a 6 month Interest Only period on your mortgage, your monthly repayments would drop from $1339 per month to $862.50 per month, a saving of $476.50 per month. At the end of the Interest Only 6 months your balance would be $300,000.
For some of us the interest only option will be enough relief to keep you going, and in my opinion, is better than seeing your debt grow.
However for some, there may be no other option but to ask for a Repayment Holiday and we will be able to help you with that. Put into perspective, 6 months relief to get you through on a typical 30 year mortgage, later down the track you will probably forget that you took this option. To understand how the two options could look, just give me a call and I will run the numbers for you. I can also help you to apply.
New Zealand economy and housing market
If you want the most up to date information on the NZ economy and housing market, click and follow Tony Alexander, my favourite New Zealand economist who is publicising in-depth, easy to read reports every week.
Personal insurances, now more important than ever.
For most people, their mortgage/rent 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 my own personal insurance protection and I highly recommend her. Her contact details are below.
- Jaime James
Managing Director, Principle Insurance Adviser
M 021 527 069
Level 33, 23 Albert Street, ANZ Tower, Auckland 1010
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.
We look forward to continue 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