Mortgage Secrets #3 How to Structure Your Mortgages Interest Rate Averaging

Mortgage Secrets #3 How to Structure Your Mortgages Interest Rate Averaging. Top Mobile Mortgage Broker Auckland

Mortgage Secrets #3 How to Structure Your Mortgages Interest Rate Averaging video duration 6 Minute(s) 41 Second(s), published by iRefi Mortgages on 27 06 2018 - 03:59:25.

How to structure your mortgages on the lowest rates
You will learn about interest rate averaging and why the lowest rate isn't always the best rate
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How to structure your mortgages on the lowest rates. You will learn about interest rate averaging and why the lowest rate isn't always the best rate.

If you wanted the cheapest possible interest rate today, it’s likely you would fix your whole mortgage for one year on rates barely above 4%. Consistently we’ve helped clients secure 4.09% for 12 months fixed in 2018…

Don’t be fooled into short term thinking. The bank will often sharpen their rates-offering for a specific term to get you to lock in for a specific period i.e. 2yr or 3yr discounts.

If rates were significantly higher next year, you would then have to refix your home loan at a much higher rate and face a massive increase in your interest expense costs. This is a likely scenario, as you would have seen in the years that have passed, rates do get much higher. Just ask people that had mortgages in the 80s and 90s!

Predicting interest rates is IMPOSSIBLE. Any economist, banker, broker, politician, taxi driver, or neighbour who says with certainty were rates are going is delusional. In 2014 the NZ Herald published numerous articles citing famous brokers and bankers saying that rates were going up again from 5% ranges and the good times won’t last. Fast forward 4 years and we’ve had rates closer to 4% than 5% for most of that time… no one knows. So you should plan for the worst, expect the best, and find the middle ground.

What you should learn about is Interest Rate Averaging which protects the downside of big fluctuations in interest rates while still benefiting from the lowest rates on offer. This strategy is safer that simply fixing every loan on the same term.