How to save thousands by not floating!

9th December 2014

Do you currently have a large floating loan?

The standard floating rate advertised on interest.co.nz is 6.74%.

Whereas the standard 2 year rate is only 5.75%, a saving of 1%!

So, say you have a $200,000 floating loan:  Over the next year you will pay $2,000 more than if you had fixed at 2 years!

SO WHY ARE YOU FLOATING?

Generally I recommend that you have a small floating portion of normally $20,000 to $30,000, with the aim for you to pay this off over the next year or two until your next fixed portion comes up to re-fix.

Don’t put all your eggs in one basket

I always like spreading my risk, so normally suggest that you have some short term loans, some medium term, and some long term.

A great rate I have recently seen is 5.89% for four years.  It is well below the floating rate and also gives you protection for four years.

To get a great rate, either ask a mortgage broker for help or negotiate with your bank!

The banks are giving large cash incentives at the moment:  The client who received the 5.89% for 4 years also received $4,500 cash!

Kind regards,

Ross Barnett