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January 14, 2011 at 7:30 PM #655223January 15, 2011 at 12:47 AM #654241
Anonymous
GuestIt is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.
Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.
Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]
What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.
January 15, 2011 at 12:47 AM #654306GuestIt is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.
Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.
Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]
What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.
January 15, 2011 at 12:47 AM #654895GuestIt is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.
Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.
Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]
What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.
January 15, 2011 at 12:47 AM #655033GuestIt is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.
Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.
Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]
What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.
January 15, 2011 at 12:47 AM #655363GuestIt is weird, yes, if you are from the US, and don’t get out much. The rest of world often does things differently.
Yes, if you get a loan at ASB, National Bank, TSB, Kiwi Bank, or any typical lending bank in NZ, then you can lock into a rate for at most about 5 years. Most people get a long one (3-5 years), short one (1-2 years), and some 10-20% of the loan on a variable rate loan of a year or two. You generally can’t pay extra on the balance of a fixed loan, only on a variable rate loan. That’s one main reason for having a bit on variable, in fact about the amount extra you think you’ll pay off that year. It’s complicated, but the way it is done. What worse is that 6% is really good, and rates at round 10% or more are not uncommon. Sucks to have a 6% loan (thinking it’s low) and have to renew the loan and something like 10% when it comes due. I personally would much rather lock into 3 years at 5% or less, get a home owner tax break. But, we can’t.
Don’t take my word for it. “A fixed rate home loan is a mortgage in which the interest rate does not change during the term of the loan, which anywhere from six months to five years.” [http://www.realestate.co.nz/resources/residential/home-loan-options]
What funny, is many Kiwi’s look at the way lending works in the states and think – No wonder the US is going to broke. Funny, eh? Not really.
January 15, 2011 at 12:10 PM #654390bearishgurl
ParticipantFascinating, finance_king! Thank you for sharing.
January 15, 2011 at 12:10 PM #654452ParticipantFascinating, finance_king! Thank you for sharing.
January 15, 2011 at 12:10 PM #655045ParticipantFascinating, finance_king! Thank you for sharing.
January 15, 2011 at 12:10 PM #655184ParticipantFascinating, finance_king! Thank you for sharing.
January 15, 2011 at 12:10 PM #655513ParticipantFascinating, finance_king! Thank you for sharing.
January 15, 2011 at 12:18 PM #654395SD Realtor
ParticipantI have been alot of places including both the North and South islands but it was before I was involved with real estate. Given that we are in an environment that in my opinion will be pushing rates quite a bit higher, no way would I be involved in any such short term financing, seems to me that it would be suicidal. I do not know what the banks you mentioned use to index the rates off of, so if it is local only to NZ then perhaps you are not as exposed. Seems to me that not just the US is overextended so when the money supply tightens up, and it will tighten up someday, those exposed to such short term lending instruments will be in potential problematic situations. Given that environment, it may not be a bad idea for you to sell and then sit on cash to swoop in on some possible good deals in several years.
January 15, 2011 at 12:18 PM #654457ParticipantI have been alot of places including both the North and South islands but it was before I was involved with real estate. Given that we are in an environment that in my opinion will be pushing rates quite a bit higher, no way would I be involved in any such short term financing, seems to me that it would be suicidal. I do not know what the banks you mentioned use to index the rates off of, so if it is local only to NZ then perhaps you are not as exposed. Seems to me that not just the US is overextended so when the money supply tightens up, and it will tighten up someday, those exposed to such short term lending instruments will be in potential problematic situations. Given that environment, it may not be a bad idea for you to sell and then sit on cash to swoop in on some possible good deals in several years.
January 15, 2011 at 12:18 PM #655050ParticipantI have been alot of places including both the North and South islands but it was before I was involved with real estate. Given that we are in an environment that in my opinion will be pushing rates quite a bit higher, no way would I be involved in any such short term financing, seems to me that it would be suicidal. I do not know what the banks you mentioned use to index the rates off of, so if it is local only to NZ then perhaps you are not as exposed. Seems to me that not just the US is overextended so when the money supply tightens up, and it will tighten up someday, those exposed to such short term lending instruments will be in potential problematic situations. Given that environment, it may not be a bad idea for you to sell and then sit on cash to swoop in on some possible good deals in several years.
January 15, 2011 at 12:18 PM #655189ParticipantI have been alot of places including both the North and South islands but it was before I was involved with real estate. Given that we are in an environment that in my opinion will be pushing rates quite a bit higher, no way would I be involved in any such short term financing, seems to me that it would be suicidal. I do not know what the banks you mentioned use to index the rates off of, so if it is local only to NZ then perhaps you are not as exposed. Seems to me that not just the US is overextended so when the money supply tightens up, and it will tighten up someday, those exposed to such short term lending instruments will be in potential problematic situations. Given that environment, it may not be a bad idea for you to sell and then sit on cash to swoop in on some possible good deals in several years.
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