(Ruoxi’s note: This exclusive guest post by Eugene Bartsaikin, director of Twine Financial Advisers and a Registered Financial Adviser, covers his opinion on the current mortgage interest rate environment and the strategies that homeowners can employ to maximise the opportunities and savings. Although I am personally a fan of mortgage brokers and appreciate the service a good mortgage broker can provide, I have not received and will not receive any monetary benefit from this post or any referral as a result of this post.
We’re sitting at an all year low for short-term interest rates right at this moment. The question many borrowers ask me is how to take advantage of them. I’ll break down a few common scenarios so you know what to do with your mortgage strategy, but before that, I’d like to make a claim.
Over these last several years we’ve seen the lowest mortgage rates New Zealand has ever seen (for e.g. HSBC is currently dangling a 3.85% 18-month special and major banks like ASB offering 4.15% for a similar term), yet at the same time very few are paying off their loan faster.
I’ve seen families who’ve continuously been drawing on their home equity to consolidate debt, then re-structure back onto a 30-year loan and often have little to no assets come retirement.
What’s missing is a strategy to tackle the family mortgage so equity can be freed up to work on building your legacy whether that being to start a business, buy another rental property, work fewer hours or give back more to the community.
Money is often more about behavior and psychology than it is about the numbers. A strategic approach factoring in your long-term goals, income & money personality is critical in the current environment.
So, let’s look at some scenarios about how to take advantage of the lower mortgage rates.
It can all seem like a lot of work to constantly balance your loan and keep up to date with getting offers from multiple banks. It doesn’t have to be when you have a mortgage strategy in place. Speak to our team of Registered Financial Advisers & Chartered Accountants to get your tailored mortgage strategy put in place.
Disclaimer: The opinions expressed by the guest writer are his alone, and do not necessarily reflect the opinions of Ruoxi Wang, New Zealand Premium Homes, Ray White Remuera or any employee thereof (together, the Individuals). The Individuals are not responsible for the accuracy of any of the information supplied by the guest writer. This work is the opinion of the guest writer.