Mortgage renewal time. Floating, fixed short term, long term?

[jasonu]

but you're bringing back the Yankee dollar, y'all can buy and sell all of us.


...........oh, wait........

If only that were true. The way things are going the NZD may well be worth more than the greenback.

[Oakie]

Still tossing up between floating at 6.24% and fixed at 6.4% but I don't think it will be the rate, per se, that the decision will be made on. What will be important is what it will cost me to go from floating to fixed when the time comes (if I float now). If I can get that change for free then I'll probably float but if it's going to cost me say $250 to change later there may not be enough margin between the 6.24 and 6.4 to make it worth while. Also to consider with floating is that I can pay off any extra amount I like but if fixed I can only pay back an additional 20% over my normal payment. I'll just have to see how all the factors stack up. Tome for one opf my famous spreadsheets!

[steve_t]

Still tossing up between floating at 6.24% and fixed at 6.4% but I don't think it will be the rate, per se, that the decision will be made on. What will be important is what it will cost me to go from floating to fixed when the time comes (if I float now). If I can get that change for free then I'll probably float but if it's going to cost me say $250 to change later there may not be enough margin between the 6.24 and 6.4 to make it worth while. Also to consider with floating is that I can pay off any extra amount I like but if fixed I can only pay back an additional 20% over my normal payment. I'll just have to see how all the factors stack up. Tome for one opf my famous spreadsheets!

Floating -> Fixed carries no fees You only have fees when you break a fixed term agreement

[Oakie]

Floating -> Fixed carries no fees You only have fees when you break a fixed term agreement

The fees I meant were the ones they can charge when changing ... like an admin fee to cover the bookwork regardless of which way you're going.

[jasonu]

The fees I meant were the ones they can charge when changing ... like an admin fee to cover the bookwork regardless of which way you're going.

Sounds like the bastards get you coming and going!

[davebullet]

Fix if:
A jump in 0.5% will screw you (ie. your debt servicing is high)

Float if:
The long term rates are only marginally more than the floating
You want the ability to lump sum more than 5% of the mortgage amount in any 1 year
You want to sell at short notice

Remember - fixed rates give you certainty but over the long term they exist to make the banks more money. In other words, the banks set the fixed rate at slightly higher than what the average floating rate would be over the period.

[steve_t]

The fees I meant were the ones they can charge when changing ... like an admin fee to cover the bookwork regardless of which way you're going.

I heard on the radio yesterday that ANZ currently have no fees when you switch from floating to fixed. I wonder if the other banks will follow suit. Most bank fees and even interest rates are negotiable to a certain degree

[hellokitty]

I heard on the radio yesterday that ANZ currently have no fees when you switch from floating to fixed. I wonder if the other banks will follow suit. Most bank fees and even interest rates are negotiable to a certain degree

Really? Damn! I was told it was $250 per loan to fix and that they would only fix for a maximum of 6 months - which to me seems expensive.
I have 4 loans - I wanted to combine them into 1 loan but they wouldn't do it as I would have to pay to break them etc. and the fees would be high.