What’s happening with NZ interest rates?
Filed under: Banks, Cost of living, Economics, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ
Well, the short version is: they are going up!
The longer version is that it looks like we are the only sodding country whose central bank seems to want to increase base interest rates!
If you pop onto the HiFX website, they keep a running sidebar of Base interest rate announcements around the world. Not only do we still seem to have nearly the highest rates (other than Australia lol) but ours is going up when the others are holding.
Incidentally, thats also the page that tells you how bad the exchange rate is right now. Sorry.
There is some sort of good news in the papers today, it seems that Bollard – the governor of the Reserve Bank, may actually be stopping with these silly rises, because – guess what – the economy isn’t actually picking up as well as it needs to (well Helloooo! My Mortgage is getting more expensive – where the hell do you think Ive got any money to go out and buy stuff with!). And apparently – the employment figures here were supposed to improve , and they actually worsened. Now, Mr Bollard hasn’t actually said himself that he wont be raising interest rates – the “economists” have said that they think the chance is now 25% instead of 75% that he will raise them. But that’s the way it works – economists blather on for weeks before an announcement is due, telling us what the Governor is going to say, which always makes me wonder why the governor bothers with the announcements in the first place.
Theres a wonderfully obtuse piece of prose in the article which I just had to share:
“If the economy pushes along at near-potential rates of growth, the cash rate must head back towards neutral. Neutral is not 3 per cent,” said BNZ head of research Stephen Topliss.
I have absolutely no idea what the hell that means lol. What on earth is a “near-potential rate of growth”?
So what’s the bottom line?
Well, mortgages are more expensive. Floating rates are around the 6.15% – 6.75% range, up from about 5.5%. 2 years rates are around 6.75% and 5 year rates are around 7.75% for standard mortgages. The 5 year rates seem to be fairly steady at the moment, but the floating and 2 year rates have increased with the 2 rate rises.
Even if Mr Bollard doesn’t increase the OCR on the 16th September – I would be looking at factoring in some more rises if you are looking at needing to buy a home in New Zealand in the near future. He still seems intent of costing us a small fortune in interest and refusing to let us get ahead financially.
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Should you be forced to save?
Filed under: Banks, Cost of living, Economics, Property & General Investing, Retirement, Pensions and Kiwisaver
Forced savings – in the form of compulsory superannuation (or – shudders – compulsory Kiwisaver) is back on the agenda in new Zealand. Because apparently, not enough of us are doing as we are told and opening up Kiwisaver accounts. So we need to be made to do it.
This comes out of the Tax Working Group, now we have to pay some more academics to sit around and tell us how we need to save for retirement and how we need to do it. I hope they get different people from the ones that just beat the living crap out of any Kiwi that was using Property to try and fund their retirement. Apparently that doesn’t count as retirement planning, cos it’s not shares or managed funds.
So when they talk about “Forced Savings” just be aware that what they really mean is “Forced Stock Market Investments”.
I’m not impressed – if you couldn’t tell. 
I personally believe that forcing people in a low wage economy like this to give up at least 2% of their after tax salary is just not on. The “theory” is that if we all do this – then it will cause investment in businesses (through the sale of shares) to increase, and those businesses will then be able to pay the staff more.
Anyone actually think your wages are gonna go up?
Because heres the thing (speaking as a complete non-economist here of course):
Buying shares on the stock market does not actually put money into the business. It puts money into the pocket of the guy selling those shares. If that just happens to be the company floating shares – then yeah – you just invested money in that company. Otherwise, some guy on the street sold some shares and you bought them.
BTW, we recently found out that if you work for one of the banks, which just happens to be a “Default Provider” of Kiwisaver (where you money sits if you don’t bother to actively choose a fund), they take their “Employer contributions” out of you salary. So basically, they don’t actually contribute to their own staff’s Kiwisaver fund.
Why is this not illegal, and why is it still being allowed? And how the hell does such a company get to run a default fund???
So regretfully – still not a fan of Kiwisaver, and would still like the government to keep its grubby little paws of my money thank you very much!
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And interest rates went up.
Filed under: Banks, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ
Mr Bollard did as he was told by almost everyone that he would do and put the base rate in New Zealand up to 2.75%
I wait with baited breath to see what the banks do and how much is going to cost us all. Honestly – I do!
I thought it was worth sharing some gems from the article on stuff though – because its the kind of thing that is said so often, makes no sense, and doesn’t get challenged:
“With the domestic recovery on track, we expect the RBNZ will continue to hike the OCR steadily in 25 basis point moves at each meeting, barring a substantial deterioration in New Zealand funding costs as a result of the European soverign (sic) debt crisis.”
Um Ok, my mortgage has to go up becuase of something of that happened in Greece? I don’t live in Greece – I live in New Zealand! What next – a butterfly flaps its wings in Mexico and Im declared bankrupt???
Cameron Bagrie, chief economist at ANZ New Zealand, also expects the OCR to hit 5 percent over time.
I predict that one day I will die. I wonder if I can find someone to pay me to state the blindingly obvious. Rates go up, rates go down. At some point it will hit any number of numbers. Pick one – you too can be an economist!
“Along with ongoing growth in Australia and recovery in the United States, this has so far offset weak growth in some other export markets. Against this backdrop, New Zealand’s export commodity prices have increased sharply over the past few months, boosting export incomes.”
Sorry – even I cant turn that into plain English!
But basically – the banks will probably increase the amount of money they now want off you – cos NZ money just got more expensive. The reason they didn’t drop the rates when the OCR dropped was because Overseas money was too expensive. Either way – we get screwed.
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Why exactly should interest rates in New Zealand go up?
Filed under: Banks, Cost of living, Economics, Interest Rates, Credit Cards & Mortgages in NZ
The reserve bank meets tomorrow to tell us all whether our interest rates are going up. I’m not really sure why they need to bother because as usual the papers and so called “experts” have already told us they will be going up.
But why?
Well basically Reading through an awful lot of very boring guff, it’s because things are getting better financially for New Zealand. And what better way to celebrate than for some arse to tell us our mortgages have to get more expensive. I mean- it wouldn’t do for us to go out and try and spend some of the extra money we all apparently have burning a hole in our pockets!
I know life isn’t meant to be fair, but come on Mr Bollard. This year we are already getting an increase in GST, and due to the new emissions trading scheme the power companies are going to increase our power bills and petrol is going to have more tax on it, even Air New Zealand is upping the cost of flights to cover it. And it’s not as if the banks are charging fair mortgage rates in line with the the reserve bank anyway. The bank fixed rates are the same as when the OCR was twice what it is now. And yet it almost worth betting real money that an increase on Thursday will be a perfect excuse for the banks to charge even more.
I just don’t get it.
They giveth with one hand and they nick it straight back with the other!
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How much did we save on our mortgage exactly?
Filed under: Banks, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ
On the 8th February, we paid of one of our personal mortgages. It’s taken me this long to be able to blog about it because ASB wouldn’t send me the closing statements, and as soon as it was paid off (as in about 2 seconds later) the whole shebang disappeared off my internet banking. So I had no way of working out the numbers, or indeed proving that I had done it.
I was a bit peeved.
Well now I finally have the whole statement, from day one to the last day, with all the numbers. It makes good reading.
Now this was part of our original $265,000 mortgage that we took out to buy the family home. We split that into 2 bits – $100,000 was kept as a Variable rate Revolving Credit Mortgage, and the rest was kept as a Fixed Rate Mortgage for $165,000 – that’s the one we paid off.
- It started on 9th September 2005 with a rate of 7.42%
- The starting balance was $165,000
- The lowest interest rate we had was 5.42%
- The highest interest rate we had was 9.15%
- The average interest rate was 7.39%
- We took out a 20year term on it, but paid it in 56 months.
- Based on that – we should have paid $151,356 in interest if we had paid it at the normal 20year term.
- We actually paid $43,607 in interest
- We saved $107,749 in interest.
That’s seriously mind blowing!!!!
We still have $55,000 left to pay on the revolving credit part of the mortgage, but most months we don’t actually pay much interest on it because our savings sit in there and it doesn’t often go into a negative balance. It is at the moment while we have to adjust to Hubby’s self employed income, but its rare to have to pay interest on it.
Which is kinda cool.
You know – this was not easy to do, but it really wasn’t that hard either. And it was certainly worth the effort when you look at how much we avoid paying the bank from here on in. You know – having worked out that saving I think I need a cup of coffee and a sit down – because its one thing to know that that’s gonna happen. It’s a whole other ball game to know you actually did it.
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The Inland Revenue is sitting on HOW much of our money???
In the Dom Post yesterday was a short piece about the Unclaimed Monies department at the Inland Revenue.
It seems that if money has been sat untouched in banks, businesses or insurance policies for more than 6 years, it gets given to the Inland Revenue for safe keeping. They keep a list of all the people involved and how much, but you have to know its there and claim the money.
They currently have over $5,000,000 sitting there.
Now it wont affect any new Migrants because you wont have been here long enough to have funds lost in a bank account anywhere. We have only been here 5 1/2 years (exactly today as it happens). But It the kind of thing I really detest about the IRD so i felt it worth blogging about. Because there something I just don’t get.
There IRD has the most extraordinary powers to chase unpaid taxes. They have huge resources to chase you and track you down. So why are they relying on you to know about their web page and tell then to give you your money back?
Most of the amounts we are talking about a re a few hundred dollars. But some people have ten or twenty thousand stuck in there. This is not small fry!
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Will KiwiBank become an AussieBank.
Filed under: Banks, Property & General Investing, Retirement, Pensions and Kiwisaver
There are rumours that the NZ (National) government are thinking of selling some State Assets. Which for many people is the worst thing a government can do and brings out all sorts of diatribes. I’m in two minds about it myself – I think it’s good to have assets – even if you are country, but also you have to be prepared to sell them if they are basically not working for you, or you are in financial trouble. There’s just no point having a boat load of shares looking pretty if you cant afford your mortgage this month.
But when it comes to government assets – a whole load of issues come up. Which as far a my admittedly not-politically-astute mind can grasp comes down to Labour wont sell them – National will. In fact just prior to the financial world crash – the NZ government at the time (Labour) went so far as to buy back KiwiRail which had previously been privatised and was failing, at a massively over inflated price of $690m when it was worth about $369m.
So the first head on the chopping block this time round looks to be KiwiBank.
Now I’m not sure of all the pros and cons of the case – but what I can tell you is I’m pretty bloody disgusted at the sheer amount of bunkum being spouted about the effect this would have on new Zealand if it was sold. It’s a bit like the plonker who said that if we used credit cards we would lose our sovereignty to Australia. The way the opposition is talking it up – a float of KiwiBank and sales of shares to New Zealanders will ensure that KiwiBank is owned by the Aussies. Or even worse – in the hands of greedy “foreigners”.
And thus – ordinary Kiwis will lose out on something that they own.
But here’s the thing:
Firstly – if the Shares in KiwiBank are sold to Kiws – then it will only end up in the hands of “greedy foreigners” if the Kiwis sell the shares to make a fast buck. So who would really be the greedy ones?
Secondly – do Kiwi’s really “own” Kiwibank? If we do – where the hell are the profits we should be sharing in? The government gets a cut – which technically I guess Kiwis get back in the form of government spending – but c’mon! That hardly the same as being a shareholder and having a stake in the company – or getting dividends.
Thirdly, we also “own” most the electricity companies in New Zealand, or rather as with KiwiBank the government owns them. And how are rewarded? With ridiculously high electricity prices which just go up and up and up while the companies we “own” make more and more profit. Its estimated that we have been overcharged by the electricity companies we “own” to the tune of $4.3 Billion in the past 5 years. Hmm – yes – ownership of companies via the government is really working for us.
So all in all – when you hear about the horror of selling national assets – don’t necessarily believe what the papers are telling you. If you disagree with privatisation – fair enough. But just take a moment to wonder if you are being fed a line that is somewhat an exaggeration. That’s not to say that selling KiwiBank (or anything else) is a good idea. Just that it wont cause the destruction of life as we know it.
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Bank Charges when traveling to Australia 2
So what do the banks screw you out of on top of the odd company trying to get you to pay extra for no reason?
Well, it felt like we needed to Phd in something-or-other to understand the charge structure and whether we were better off getting cash out or paying on a credit card. So here is the fee structure from ASB
Cash Withdrawals Overseas:
$5.00 charge each time.
And then there’s this little gem – which applies to both Cash Withdrawals and Credit card transactions.
Offshore services margin
All cash withdrawals made at an overseas ATM using your ASB ATM or EFTPOS card will either first be converted into US dollars and then into New Zealand dollars or converted directly from the currency in which the cash withdrawal was made into New Zealand dollars at the applicable conversion rate.
Offshore service margins of 1.1% are added to the converted New Zealand dollar amount of each cash withdrawal made using your ASB ATM or EFTPOS card at an overseas ATM, excluding those withdrawals made using Commonwealth Bank of Australia ATMs.
The offshore service margins comprise a Visa international service assessment of 0.85% imposed on ASB by Visa and passed on to you, and an ASB margin of 0.25%.
The converted amount and the offshore service margins will appear on your statement.
For overseas cash withdrawals made using Commonwealth Bank of Australia ATMs an ASB retail exchange margin of 0.7% is included in the conversion rate by ASB. The total converted amount (including the ASB retail exchange margin where applicable) will appear on your statement.
What the bleeding hell does that mean?
Well in short – it means they are going to make a profit out of the conversion from NZD to the foreign currency. The problem is that some profit is already loaded into the exchange rate, so this is on TOP of that profit.
But the real dastardly bit is the part where they say they will either convert straight from NZD to the foreign currency if you withdraw cash – or they will bounce it via USD first. Now why are they doing that?
Basically, because they can skim some more money off the transaction by effectively trading currency at your expense if there is a wide variation in the currencies. Like the Holiday Inn and its 1.5% surcharge: in itself its small amounts, but added together with all the transactions occurring – its gotta add up. I wish I knew how it all worked - but like much in banking its all shrouded in mystery and complicated mathematics – so we as the consumer cant really ever check things like this. Which is annoying and quite frankly wrong. What are the banks hiding?
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Bank Charges when traveling to Australia.
NOTE: Opps – this got stuck in drafts rather than getting posted, so should actually have been posted before the “What the Shysters at the Holiday Inn did next”.
Sorry for any confusion.
If there’s one thing guaranteed to get my blood boiling that is not anything to do with immigration – its bank charges. I read today that New Zealand is following Australia in taking a class action against the banks for overcharging on “special fees” such as dishonour fees: charging $30 when it actually costs them about $1 to process the thing.
However still no-one is shouting about the ridiculous amount we get charged to spend money on our New Zealand cards when we go abroad. Even more disgusting when you consider that all the New Zealand banks apart from Kiwibank are actually owned by Australia – so why the bloody hell are they charging us fees when we visit their country and try to spend our money. All the money they screw out of us in profits comes here anyway – so it really is beating the crap out of us when we are down.
This evening we ate in the Hotel Restaurant at the Holiday Inn. As we went to sign the bill (which was being charged to our room) we saw a notice on the bottom of the receipt saying that there was a 1.5% charge added if you paid by credit card. Now this just pisses me off!
Companies should not expect their customers to pay their bank fees. We pay our own for crying out loud. But this got us wondering: were they expecting us to pay this 1.5% charge on our room bill as well?
Oh yes – they were!
Unfortunately when we asked about it at the front desk we were pointed (literally) to a sign (single) on the desk what mentions the charge.
Ok – I don’t care – its not on the booking form when you book the room, we weren’t told about when we checked in– the (single) sign was not pointed out to us, and it was only that we actually tend to read receipts that meant we knew were going to be charged extra on our bill. We asked for a business card for the manager and were given a feedback form to fill in.
Um – I don’t want a feedback form – I want the charge taken off and I want to speak to the manager! Now we were severely peeved. Eventually I decided that I was not going to be able to sleep while I was this angry. This is supposed to be relaxing trip – a chance to get well after the last few years of stress and illness: so to have to greedy money grabbing hotel decide to screw us out of extra money was not something I needed to deal with right now.
We eventually managed to get hold of a duty manger, and asked for the charge to be removed. This went reasonably well in that the charge was taken off, but I don’t think she really ever got why I was so angry – she kept asking what else had they done to upset me or what else was lacking in the hotels service. It is completely lost on these people that screwing their customers out of even a cent more than they should be is just wrong. Its unethical, its dishonest and it relies on the customers not noticing. And it is the most appalling customer service.
Lets be clear on this:
They do it because they know almost none their customers will notice the extra charge, and if they do, they won’t say anything about it.
Those of us that object to it get the charge removed.
Be one of those people!
Please don’t give them the pleasure of treating you like a mug. You already pay extra bank charges to buy anything when you go abroad – so don’t be conned into paying the companies bank charges as well. It’s a cost of them doing business – just like buying toilet rolls for the staff toilets. They don’t ask you for an extra dollar on your bill so the staff can wipe their bottoms do they? So why do they feel they can charge you to cover their bank charges?
BTW – the same thing happened this evening at the Crowne Plaza restaurant- owned by the same parent company (Intercontinental Hotels Group- IHG). Again – no mention when we made the booking, no one told us when we arrived, we just spotted the (single) sign on the desk. We spoke to the maitre’d before we sat down and said we wouldnt pay it – and could he let us know if this was a problem as we would not take the table if it was. He immediately told us that there would be no charge, and confirmed that later in the meal.
They know damn well they are breaking consumer law by not making clear extra charges at the time of booking, and they know damn well that they have to remove the charge if people tell them to.
Is what I say to this behavior!
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What the Shysters at Holiday Inn did next.
It’s our own fault – we have to admit that. We swore we wouldn’t give the Intercontinental hotels group (IHG) any more of our business after issues at the Intercontinental in Wellington. But the Holiday inn and the Crowne Plaza were the conference hotels, and there were busses provided for the delegates so it kinda made sense to go with that despite our desire not to give them our cash.
It looks like we should have stuck to our guns and Hubby walk five minutes to the busses.
On top of finding the scam over the 1.5% “surcharge” on anyone paying by credit card, yesterday we had a rather unwelcome message on the hotel phone. Now I don’t know about you but I have a tendency to assume that if the message button on a hotel phone is flashing when I’m on holiday – it means disaster has struck and its my family needing to get hold of me urgently.
But no – it’s the hotel management.
So what is so urgent it needs a message?
Turns out our bill has reached $1000 and for “security” reasons they need us to come down and pay some money off the bill.
WHAT??????
I ask what I consider to be a sensible question: “You do know we are booked in for 9 nights don’t you??” Yes – seems they are which at a rate of $152 (special rate – usually nearer $250) a night means the bill was always going to come to over $1000 before the time was up. Would I like to speak the manager? Hell no – I’ll leave hubby (delegate at a Security conference) to have that amusing conversation.
So apart from the usual bullshit about how the IHG always do this (uh no you don’t – you didn’t in Sydney last year!) and this is quite common in hotels round the world (uh no – its not actually – $1000 might cover 2 nights in a London hotel – do you really want to know how many times we have been asked to pay something off the bill???) and then a befuddled silence when asked to explain what the **** they took an imprint of our credit card for – it was decided we would look for another hotel.
Because like it or not, and whether they accept it or not – they have just told us they don’t trust us to pay our bill at the end of the stay. Now its not as if they don’t have a history of us. Hubby has been in the rewards program for many years. And for the past 2 years we have had enough points to get to Platinum on their program – which requires a fair sum of money to have been spent and a scary amount of stays. I personally assume that if we were known to have run out on our bills before – someone may have spotted that and mentioned it to the hotels in the group.
The holiday inn were “sorry” for offending us and would not charge us a cancellation fee. I should bloody well hope not!
Oh the irony!
When we went to check out, we were given a copy of the bill to check. We always check the bill, because oddly enough, strange items that you didn’t use have a tendency to end up on the bill from time to time. A bit like the banks. Who also keep trying to slap you with extra surcharges. Hmm I wonder if someone from a banking history has taken over IHG?
It turned out that they had the wrong room rate on the bill – and were trying to charge us $200 a night instead of $152.
Which meant the bill so far actually only came to $917.80.
Chortle Chortle.
So rather than spending the afternoon on the beach, we went to check out some other hotels, and by 5 o’clock were ensconced in One The Esplanade, right on the beach, and with views to die for.
So what was this REALLY all about?
Once we stopped fuming, and were sat down at the hotel – Hubby happened to glance again at the bill, and noticed a really interesting note on the bottom:
Colryan Pty Ltd (receivers and managers appointed)
Hmm, so all this bollocks about “security” really is just that. The company is in receivership and the receivers appear to have instructed them to ensure bills do not go over $1000.
Which is not about security – it’s about the fact that your company is in trouble. Only because you have lied and tried to say it’s because we might run off and not pay the bill – you have just lost $600 in accommodation fees. Being an arse is bad enough – being a dishonest arse is worse. There was no reason not to point out that notice once we had decided to leave, and explain to us the truth of the situation. We would still have been unhappy and refused to pay upfront, but we would at least not been accused of being likey to run out on the bill.
You know here’s a thought IHG: Stop pissing off your customers, stop treating them like crap, and maybe you would stop losing so much money and your hotels would not be going into receivership.
Of course what the hell do I know? I’m just the customer holding the purse strings.
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