(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.
It’s only 8 days away from Christmas and the season of family, friends & laughter is upon us. Usually around this time of year, the crystal ball begins to surface, and clients are often asking me what I think on the property market and interest rates.
Trouble is, I don’t have a crystal ball… and nobody else does either. Today’s focus is on interest rate expectations for 2019. I’ll also show a method on assessing whether a rate is good value or not and how to take advantage of the current interest rates.
With every fixed rate renewal, we are requesting break fees from the lender on all remaining loans. We then compare those break fees with the interest savings from the old rate to the new rate, multiplied by the remaining loan term.
This creates an interest/break fee arbitrage opportunity which sometimes works out in your favour but sometimes it doesn’t. It’s an essential exercise to go through as if it works out well, there can be a substantial saving.
One client this week has saved over $1,500 over the remaining 12 months and we even extended their fixed rates onto a longer period!
At Twine Financial Advisers we specialise in crafting tailor-made mortgage strategies collaboratively with our clients and their team of professionals. Most clients save on average $3,000 – $5,000 upfront from a mortgage review. But the lifetime savings from getting the best rates every time, intertwined with a cohesive mortgage strategy designed to your lifestyle needs, changes the playing field altogether.
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.