Where do you want the OCR?

Higher
5
29%
3% is fine
6
35%
Lower
6
35%
 
Total voters : 17

Re: Official Cash Rate Cut To 3%

Postby danose on Thu 12/Mar/09 3:36pm

Tama wrote:Bloody hell - just when I finally have savings in the bank the interest falls through the floor. My monthly interest pretty much halved between January and February :(


look at the positive side - presuming those savings are towards deposit on a house (they are aren't they?) you'll win in the long term. Now we just need house prices to get on with sorting out their affordability (banks requiring 20% deposits are helping nicely there)
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Re: Official Cash Rate Cut To 3%

Postby Trail on Thu 12/Mar/09 3:47pm

phunk wrote:
Jono wrote:
phunk wrote:Ima gonna save a chunk of cash when my current fixed rate expires. Pity its a couple of months away..


We've always been too slack to get around to fixing part of the mortgage - always had floating. There was a short period where we paid more in interest when it spiked, but for a part of that we were mortgage free anyway.

In the meantime, you could take out your rage at the world around the iniquities of fixed interest contracts by kicking a cat or something...


But I fixed knowing full well the consequences of what I was doing so feel no rage at all, in fact my net position is probably still positive as the floating rate was quite high at the time, and I only fixed for a year knowing that rates would come down by the time the contract finished. I did not count on a complete economic collapse though..


Exact same position we are in. It is all good, and it will be all better as soon as we can fix it even lower ;)
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Re: Official Cash Rate Cut To 3%

Postby sweet_P on Thu 12/Mar/09 3:58pm

Trail wrote:
phunk wrote:
Jono wrote:
phunk wrote:Ima gonna save a chunk of cash when my current fixed rate expires. Pity its a couple of months away..


We've always been too slack to get around to fixing part of the mortgage - always had floating. There was a short period where we paid more in interest when it spiked, but for a part of that we were mortgage free anyway.

In the meantime, you could take out your rage at the world around the iniquities of fixed interest contracts by kicking a cat or something...


But I fixed knowing full well the consequences of what I was doing so feel no rage at all, in fact my net position is probably still positive as the floating rate was quite high at the time, and I only fixed for a year knowing that rates would come down by the time the contract finished. I did not count on a complete economic collapse though..


Exact same position we are in. It is all good, and it will be all better as soon as we can fix it even lower ;)

:withstupid: Bring on May 7th for us...
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Re: Official Cash Rate Cut To 3%

Postby Tugboat on Fri 13/Mar/09 5:55pm

happybaboon wrote:I find it reassuring that in troubled times our OCR is much higher than other 1st world nations. Still plenty of room to wiggle around in order to stimulate the economy further.


Not really that much wiggling room left... maybe another percent tops. Unlike most other "1st world" nations we are far too reliant on overseas capital to keep our economy ticking to ever realistically hope for a zero or 1% cash rate.
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Re: Official Cash Rate Cut To 3%

Postby happybaboon on Fri 13/Mar/09 6:03pm

But Japan is already at a 0.1% rate, and other nations aren't far behind. Even if our minimum level is a bit higher than theirs it still appears to me that we're a little further away from complete disaster than they are.
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Re: Official Cash Rate Cut To 3%

Postby Tugboat on Fri 13/Mar/09 6:08pm

happybaboon wrote:But Japan is already at a 0.1% rate, and other nations aren't far behind. Even if our minimum level is a bit higher than theirs it still appears to me that we're a little further away from complete disaster than they are.


We do appear to be more insulated than some countries from the fallout of the credit crunch but our rates will always be higher than the likes of Japan and the US simply because we are a tinpot small and very open economy that can't sustain itself. What's highly unusual is our position of rate competitiveness with Australia. That could be very perilous if we stay at a lower rate than our bigger, wealthier neighbours.
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Re: Official Cash Rate Cut To 3%

Postby happybaboon on Fri 13/Mar/09 6:27pm

Tugboat wrote:We do appear to be more insulated than some countries from the fallout of the credit crunch but our rates will always be higher than the likes of Japan and the US simply because we are a tinpot small and very open economy that can't sustain itself. What's highly unusual is our position of rate competitiveness with Australia. That could be very perilous if we stay at a lower rate than our bigger, wealthier neighbours.

Aussies haven't adjusted their rates for awhile though. They'll probably follow us and drop down past us again.........
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Re: Official Cash Rate Cut To 3%

Postby nostromo on Sat 14/Mar/09 10:01am

Any bets on what will happen to actual mortgage rates?
We have fixed mortgages that start to roll over next year, but our accountant is telling us we will be better off to break our mortgages on a rental property we own now.
He says this for two reasons firstly he maintains interest rates will not go lower, and will start climbing again.
Secondly for us he says the break fee is tax deductible (I never thought about that).

But how he can predict the future I don't know.
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Re: Official Cash Rate Cut To 3%

Postby Wobbler on Sat 14/Mar/09 10:03am

he might have crystal balls
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Re: Official Cash Rate Cut To 3%

Postby Tugboat on Sat 14/Mar/09 10:26am

Most forecasts I've seen have the OCR bottoming out in either April or June and then remaining stable until 2010. Given the uncertainty that prevails at the moment there's every chance that could change but it seems a reasonable assessment on current data. We are already seeing some upwards movements in the longest fixed term rates but I would expect short term rates to remain around current levels for a little while yet. If you're not rolling over till next year then perhaps breaking becomes an option. At the moment though, the forward swap rate pricing is still fairly aggressive so if your break costs are calculated on the wholesale cost of breaking the fixed term then it's still going to be a pretty significant whack.
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Re: Official Cash Rate Cut To 3%

Postby neels on Sat 14/Mar/09 10:28am

nostromo wrote:Secondly for us he says the break fee is tax deductible (I never thought about that

Neither had I, but you're quite right, best I get me to the bank next week. I'm sitting on a fixed loan that is up in June, but might try it on with the bank to see if I can break it to buy another property, might get away with it. My other two fixed loans are up at the end of the year and beginning of next year, so I'm hoping the financial recovery happens slowly :sneaky:
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Re: Official Cash Rate Cut To 3%

Postby psychavoc on Wed 25/Mar/09 9:47am

nostromo wrote:Any bets on what will happen to actual mortgage rates?
We have fixed mortgages that start to roll over next year, but our accountant is telling us we will be better off to break our mortgages on a rental property we own now.
He says this for two reasons firstly he maintains interest rates will not go lower, and will start climbing again.
Secondly for us he says the break fee is tax deductible (I never thought about that).

But how he can predict the future I don't know.

Time to fix now? http://www.nzherald.co.nz/business/news ... d=10563217

We've just signed up for our first mortgage - currently on floating but wondering what rate/length to fix at now :huh:
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Re: Official Cash Rate Cut To 3%

Postby ThingOne on Wed 25/Mar/09 10:28am

psychavoc wrote:
nostromo wrote:Any bets on what will happen to actual mortgage rates?
We have fixed mortgages that start to roll over next year, but our accountant is telling us we will be better off to break our mortgages on a rental property we own now.
He says this for two reasons firstly he maintains interest rates will not go lower, and will start climbing again.
Secondly for us he says the break fee is tax deductible (I never thought about that).

But how he can predict the future I don't know.

Time to fix now? http://www.nzherald.co.nz/business/news ... d=10563217

We've just signed up for our first mortgage - currently on floating but wondering what rate/length to fix at now :huh:


Now is the time to refix for as long as possible, 5 Years would be the best bet. I dont believe rates in NZ will get any cheaper even if the OCR is cut again,
There is a slight possibility you will see a 5 year below 6%, but theres a gamble with waiting to see.
If I had a mortgage I would be fixing for 5 years.
that said you can get a mortgage in the UK for under 1%

PLEASE NOTE.. Dont take my advice as gospel, find a reliable mortgage broker and/or subscribe to some of the economic emails sent out by the bank economists. I find Tony Alexanders one from the BNZ quite good.
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Re: Official Cash Rate Cut To 3%

Postby way_downsouth on Wed 25/Mar/09 10:32am

ThingOne wrote:
psychavoc wrote:
nostromo wrote:Any bets on what will happen to actual mortgage rates?
We have fixed mortgages that start to roll over next year, but our accountant is telling us we will be better off to break our mortgages on a rental property we own now.
He says this for two reasons firstly he maintains interest rates will not go lower, and will start climbing again.
Secondly for us he says the break fee is tax deductible (I never thought about that).

But how he can predict the future I don't know.

Time to fix now? http://www.nzherald.co.nz/business/news ... d=10563217

We've just signed up for our first mortgage - currently on floating but wondering what rate/length to fix at now :huh:


Now is the time to refix for as long as possible, 5 Years would be the best bet. I dont believe rates in NZ will get any cheaper even if the OCR is cut again,
There is a slight possibility you will see a 5 year below 6%, but theres a gamble with waiting to see.
If I had a mortgage I would be fixing for 5 years.
that said you can get a mortgage in the UK for under 1%

PLEASE NOTE.. Dont take my advice as gospel, find a reliable mortgage broker and/or subscribe to some of the economic emails sent out by the bank economists. I find Tony Alexanders one from the BNZ quite good.


Pretty fair comments, watch the 5 year rates, they have been picking up a bit recently. I would always encourage that a portion is left floating or on revolving credit to efficiently use your money (for most, any money in your normal accounts is a waste with a mortgage).

If I was getting a mortgage today, I would have a portion floating, a portion on whatever special rates are going and the balance on 5 years.
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Re: Official Cash Rate Cut To 3%

Postby j2hyde on Wed 25/Mar/09 10:37am

Tama wrote:Bloody hell - just when I finally have savings in the bank the interest falls through the floor. My monthly interest pretty much halved between January and February :(

The irony is we've all been told to save and now saving is becoming a fairly fruitless exercise. It must be rough on retirees who were relying on interest to prop up their lifestyle.

Oh yeah, and won't this push our dollar lower?


You haven't been told to save, we need to spend ourselves out of recession!

Now you've got more incentive take your money out of the bank and use it to invest in something providing a better return. I hear US government bonds are a great buy :lol:

And if it does push the dollar lower that's a good thing because the other major currencies are also weakening due to "quantative easing", so should maintain relative parity. Maybe.
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