ASB Interest rate changes – humph!
I’ve been tracking interest rate changes at ASB for a while, because I needed to decide on when to fix my personal morgtae rates. I set that up a few months ago, but noticed at the weekend that the rates had gone up again. Today it seems that other banks have followed the lead, and mortgages are now firmly going up again. This is even though the Offical Cash Rate is stable and has been for months, at 2.5%.
So I’m afraid that mortgeages in New Zealand are still going to be ridiculously high and unless you intend to buy a house here in cash – you are still going to be paying an awful lot of money to buy a house here.
ASB INTEREST RATES
As at 11:56:19 a.m., Tuesday 14 April 2009
Interest rates are subject to change at any time without notice. However, once you draw down a housing fixed loan its rate is will not change during the term you selected. Term Rate
Housing Variable 6.40 % p.a.
Housing Fixed (6 Month) 5.50 % p.a.
Housing Fixed (12 Month) 5.70 % p.a.
Housing Fixed (18 Month) 6.00 % p.a.
Housing Fixed (24 Month) 6.25 % p.a.
Housing Fixed (36 Month) 6.75 % p.a.
Housing Fixed (48 Month) 7.25 % p.a.
Housing Fixed (60 Month) 7.50 % p.a.
ORBIT Home Loan 6.40 % p.a.
Societies Clubs and Churches 7.40 % p.a.
Second Mortgage 9.40 % p.a.
Flexible Finance Facility 6.90 % p.a.
As at 09:54:59 a.m., Tuesday 26 May 2009
Interest rates are subject to change at any time without notice. However, once you draw down a housing fixed loan its rate is will not change during the term you selected. Term Rate
Housing Variable 6.40 % p.a.
Housing Fixed (6 Month) 5.50 % p.a.
Housing Fixed (12 Month) 5.50 % p.a.
Housing Fixed (18 Month) 6.00 % p.a.
Housing Fixed (24 Month) 6.25 % p.a.
Housing Fixed (36 Month) 6.75 % p.a.
Housing Fixed (48 Month) 7.25 % p.a.
Housing Fixed (60 Month) 7.50 % p.a.
ORBIT Home Loan 6.40 % p.a.
Societies Clubs and Churches 7.40 % p.a.
Second Mortgage 9.40 % p.a.
Flexible Finance Facility 6.90 % p.a.
As at 02:10:44 p.m., Friday 5 June 2009
Interest rates are subject to change at any time without notice. However, once you draw down a housing fixed loan its rate is will not change during the term you selected. Term Rate
Housing Variable 6.40 % p.a.
Housing Fixed (6 Month) 5.50 % p.a.
Housing Fixed (12 Month) 5.50 % p.a.
Housing Fixed (18 Month) 6.00 % p.a.
Housing Fixed (24 Month) 6.25 % p.a.
Housing Fixed (36 Month) 6.95 % p.a.
Housing Fixed (48 Month) 7.55 % p.a.
Housing Fixed (60 Month) 8.00 % p.a.
ORBIT Home Loan 6.40 % p.a.
Societies Clubs and Churches 7.40 % p.a.
Second Mortgage 9.40 % p.a.
Flexible Finance Facility 6.90 % p.a.
As at 03:14:43 p.m., Friday 7 August 2009
Interest rates are subject to change at any time without notice. However, once you draw down a housing fixed loan its rate is will not change during the term you selected. Term Rate
Housing Variable 6.40 % p.a.
Housing Fixed (6 Month) 5.50 % p.a.
Housing Fixed (12 Month) 5.50 % p.a.
Housing Fixed (18 Month) 6.10 % p.a.
Housing Fixed (24 Month) 6.55 % p.a.
Housing Fixed (36 Month) 7.45 % p.a.
Housing Fixed (48 Month) 7.95 % p.a.
Housing Fixed (60 Month) 8.30 % p.a.
ORBIT Home Loan 6.40 % p.a.
Societies Clubs and Churches 7.40 % p.a.
Second Mortgage 9.40 % p.a.
Flexible Finance Facility 6.90 % p.a.
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BNZ bank really should have said sorry and given us our money back!
In Avalon’s Guide, I relate the story of a bit of a cock up that BNZ bank made with our credit card. It has now made it into the New Zealand Herald, as the other party in the tale was finally in a position to move banks, and could therefore publicise the events in the hope that others will learn from this.
BNZ Credit Cards: Why you need to check your statements!
We had a new credit card with Bank Of New Zealand (BNZ), which we only ever made one payment with. We recently had a statement saying we owed $22.50 for some digital photos paid for at an online store.
We queried it with BNZ – who eventually said that we wouldn’t have to pay the bill till they investigated it. The “investigation” resulted in them sending us a letter stating that “Should we wish to further dispute the charge, please advise us in detailed writing with your signature (!?) by [Date]. If we do not hear from you by this date, I will presume that you now accept the charge and no further action will be taken.”
Well! Along with this utter garbage – we got details of the person who had made the purchase. We were sure it was just a mistake – rather than an attempt at fraud – after all – I assume anyone fraudulently using our card would buy something more interesting than photos. However – we got her name, address, email, and mobile phone number. None of which was in anyway us, nor could it be linked to us.
We sent a snottogram (of epic proportions) to the bank telling them to do their job and figure it out, and in a call to us we found out the following:
· Because it’s under $50 they don’t bother with any online security checks such as the 3-digit number on the back of the card.
· So anyone who has stolen your card will get away with it if they don’t spend up big.
· The bank assumes that the person using your card details is a relative of yours, and so they don’t worry about it, even if the name and delivery address is completely different.
· And yes – they do expect you to prove that you didn’t spend what you didn’t spend.
· Basically what this means is the banks won’t bother checking for small purchases that are not made by you.
· You have to check the statements.By the way – we closed the card down, as BNZ were beyond obnoxious about the whole thing. The lady whose information we were given (in a serious breach of privacy laws), is “having a few words” with the bank and the Privacy Commissioner.
I am so grateful to Mrs Hansford for doing this. This occurred about 18 months ago, and because they had a fixed rate mortgage, they were not able to close their accounts with BNZ the way we were. She also turned down $2000 compensation (we were not offered any by the way), which I assume would have meant they could not publicise the issue.
It really is vitally important to keep a track of your spending and balance it with what the bank claims that you spent. It is too easy to trust the bank records – and they are often incorrect. I personally feel most people would be horrified at how much money gets paid for things that they never bought, or were charged for twice. We have saved hundreds if not thousands of dollars over the years because we check our banks statements, and keep spotting mistakes.
BNZ claims these incidents are “extremely isolated”. I beg to differ. Certainly bank statements are often incorrect. And the attitude at BNZ when we contacted them about the privacy breach suggests that they really didn’t seem to think there was an issue. It seemed to be the way they usually handle such transactions.
So thank you to Mrs Hansford, and Ms Beck for publicising this issue.
More details on how to handle your money, including who to run your accounts and how to check your statements can be found in Avalon’s Guide.
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Beating the banks with the Mortgage.
Filed under: Banks, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ, The Book and Website
Today is a really good day. Because today I have managed to get one of my personal mortgages down from a starting point of $165,000 to a measly $45,000. That’s a whole $120,000 gone – that the banks can’t charge me anymore interest on.
I’m a bit chuffed.
Especially as – as well as that – the overdraft limit of my Revolving Credit account has also come down, from $100,000 to $55,000. Which means I have now paid off a total of $165,000 from my personal mortgage (62%).
In just under 4 years.
So – how have we done it?
Well, a lot of it is from budgeting and careful use of money – I have always overpaid on the mortgage by doing this. We have been able to make bigger steps in the past 18 months because we have an LAQC which means hubby gets a tax refund each month. That money always gets paid straight off the mortgage (we get it because we have mortgages elsewhere on Rentals and the rent doesn’t cover the cost of the mortgage – I think it is vitally important not to use this refund for anything other than paying off mortgages somewhere rather than living the high life and treating it as extra income).
We have also taken the decision to cash is our Endowment Policy in the UK, and we have brought over about £17,000 from that. This is the bulk of the latest reduction – giving us about $44,000 to pay off the mortgage in a lump sum.
Although we felt that it would be nice to hang on to the Endowment and wait for the stockmarket to recover (we had another 10 years to run), we had to balance that with the fact that the New Zealand banks are refusing to budge on Interest rates, and getting more and more belligerent about negotiating on rates and fees. We also decided to this despite the exchange rate being in the floor right now. I show you how to work out whether to keep money in the UK or bring it over and pay it off a mortgage in my book.
For us, the decision was a simple one: get rid of the mortgage.
I have now fixed the mortgage at 5.42% for 6 months, which takes the monthly payment down to $346.50 from the original payment of $1321.73 at 7.42% on the full amount of $165,000. Not a bad saving.
The important thing is that, even before we use the tax refund – we always pay the same amount on the mortgage that we did when the interest rate was at its highest – which in our case was $2500 a month. This means that as time goes on, more and money of the money we send to the bank is paid off the principle and we can get rid of the rest even faster. We continue to pay the $2500, rather than take the savings offered and spend the rest. That is one way to beat the banks.
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How to beat the banks?
Filed under: Banks, Economics, Interest Rates, Credit Cards & Mortgages in NZ
I don’t know if the Dom Post are recycling news today (either they couldn’t get to work because they have swine flu, or stayed home cos its cold), but there is another article in the Dom Post today about the finance minister telling us how to beat the banks.
Only he doesn’t.
He simply says that if the banks don’t drop their interest rates – customers will go elsewhere. Which is unlikely to happen. As explained here from the last time this article was published.
You know – I’ve put a lot of thought into this – and as far as I can see the only way to really beat the banks (in the word of a rather old movie Wargames) is “not to play”.
At the moment in New Zealand, if you have a mortgage, the banks have you over a barrel. You can’t move banks unless you have 20% equity in your house – and a lot of people don’t have that (because the banks lent them 90%+ 2 years ago, and values have dropped). So you are stuck there, and they can charge high interest rates because they know you can’t move.
If you want to really beat the banks –get rid of the mortgage. Fast. And then watch the banks weeping because they can’t screw you for thousands in extra interest. I’ve been stuck in this situation for 18 months now – where I wanted to buy another rental and the banks told me I needed to pay down about $20,000 off my current lending. Which I did within a few months, by which time they had changed the rules, and needed more paying off before they would re-lend. In the 18 months since then, I’ve reduced the personal mortgages by over $70,000. And I’ve decided that rather than borrow more money to buy more rentals – I want the bank to have absolutely no hold on our house whatsoever. I’m going to keep going so that one day (in the not to distant future I hope) I can tell the bank to get stuffed.
I don’t really know what Mr English is expecting – the banks are not taking any notice of calls to drop the rates – and why would they if the finance Minister won’t do more than wring his hands. I still think the first step is to remove the deposit guarantees. When the banks start dropping the rates to a reasonbale level, then they can have them back. But until there some fairness applied here – the taxpayer should not be gaureteeing bank deposits. Its just wrong.
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Now even our MP’s want to know why the banks are ripping us off.
Filed under: Banks, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ, Property & General Investing
Despite a 2.5% cash rate, and Standard and Poor’s not downgrading the country’s economic status, the New Zealand banks are still on a rort, ripping us off with now 8% interest rates on 5 year fixed terms. I don’t know how they sleep at night – I really don’t.
According to an article on Stuff, the MP’s in a cross part committee (well – we are bound to see some action there then) have expressed their concern over the lack of action from the banks. Especially since they now have a guarentee on deposits from the government. Heres a thought – take the guarentee off them till they learn to behave! Especially since its us taxpayers that are covering it while they beat the crap out of our budgets!.
Today, Bill English, the finance minister has said that we, the consumers, should make our displeasure known by taking our business elsewhere. What elsewhere??? They are all as bad – all charging way too much, and if you try and move, you will have to prove the (now lower) value on your house and have a bigger deposit. And you will probably get screwed on break fees. So nice thought – just not very practical right now. Trust me – If I could change banks – I would!
At the moment the only way to beat the banks greed is to pay off any mortgage as fast as humanly possible. I’m just coming to the end of my fixed terms with ASB ( they hold 2 personal and two business mortgages of mine). I’m not fixing the personal ones – because I don’t intend to have them much longer than a year from now. I’ve fixed one of the business ones for two years. I would have fixed for 5 – but as they are being ridiculously stupid by putting up their 5 year rate – they can frankly go to hell!
When we stared buying investment properties, our intention was to never pay off the mortgages on them (the ASB business mortgage is secured against the family home – so we always intended to pay that one off) – but the way they are behaving – I think I’m changing my mind on this stance.
If you are thinking of moving to New Zealand (and there are many reasons to do so) please be aware of just how much you are going to get hammered for if you need a mortgage. And bear in mind that these banks are still expecting 20% deposits of you – so they are not only overcharging, but they are not exactly taking a risk on lending either. You are now looking at between 6 and 8% interest on your mortgage in New Zealand.
Anyway – as far as the personal mortgage goes – I had always intended to pay it off in 10 years. Looks like I’ll be doing it in 5years – which means by the end of 10 years I should be able to get rid of the two business mortgages at ASB as well. That will be a good day.
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Why on earth is New Zealand in danger of getting a “Credit Downgrade”???
I just don’t get it. Now maybe it’s just cos I’m still a bit thick when it comes to economics and high level finance – but on the other hand – maybe it’s the system that needs a bloody great kick up the backside.
So what is the deal?
Well, there’s this agency called Standard and Poor’s. They research financial institutions and stocks, and then publish their findings. They also run Stock Exchange Indexes (you may see something called the S&P500) where you can invest in what they consider the top 500 shares. As far as the ratings are concerned – if S&P give a bank or investment a AAA rating then you are supposed to be able to invest with a large degree of confidence – whereas if they rate it a C then you need to worry.
It seems S&P also run Sovereign Ratings where they rate Government bodies, higher education, and housing sectors round the world. Right now they rate New Zealand as AAA and Stable for both Local Currency and Foreign Currency – which sounds good and healthy. However they have said that the outlook is Negative for New Zealand as a Foreign currency, and we are at AA only. This means we are not a good place to invest in from abroad all of a sudden.
Well – 
I say to that.
Standard and Poor have a bit of a cheek rating anything right now – on account of their ratings of hundreds of companies and investment products which turned out to be complete and utter rubbish. OK – so S&P dropped the ratings – but only after everyone had lost everything – by which time even a monkey could have said the investment was a bit dodgy. But S&P by giving these investments (and that included the CDO’s behind the Sub Prime mess that started this recession) gave them a respectability that they should not have had. People trusted them – and lost everything.
Standard & Paws - we noze what we is doin, right?
So how on earth do these people get to say that New Zealand should be downgraded??? For crying out loud – we are doing so much better than other countries during the recession.
Apparently – they will reserve their final decision until after the budget on Thursday. I am so glad they are taking the time to consider their verdict on us!
If anyone is interested – despite the total cock-up of the UK financial services – and a budget that involves the UK government borrowing more money in the next year than has been borrowed in the history of the UK Parliament – they still get a rating of AAA (Negative) – for home and foreign currency. What a bloody joke! Lets be clear on this – the UK government has taken over nearly all the banks – and is about to bankrupt the next 10 generations of Brits and yet they are still rated AAA. We are a small blip on the bottom of the world – not one of our major banks is about to go under, and are in fact still making revoltingly big profits. And while it is likely that our Government will borrow an awful lot of money to get us through the recession – it is not likely to be the gobsmackingly stupid sums that Gordon Brown is grabbing.
Why on earth are these bozos even thinking of downgrading us??? Why is anyone giving these bozos the time of day??? They have proved they are pretty bloody hopeless.
And if I wasn’t offended enough – if these people in their “wisdom” decide to downgrade us – then apparently our mortgages will go up. So while the UK goes to hell in a handbag and mortgages are at almost 0% already – we are doing reasonably well, already paying 6% on our mortgages and these twits are going to be responsible for us paying even more.
I need a drink!
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Would you pay your mortgage or your Sky TV bill?
Filed under: Cost of living, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ
There’s a really weird article in the paper today, about a report from Dunn and Bradstreet. It says that out of 1000 people questioned, a larger percentage (35%) would pay for their Pay TV first rather than the Mortgage (20%). Which is really scary. When did Pay TV (and it turns out – Mobile Phone Bills) become more of a necessity than paying for the roof over your head???
I just don’t get it. I guess I always remember my parents telling me to always make sure that paying for somewhere to live came first. I also wonder what the point of keeping Pay TV is if you don’t have a house to sit in and watch it!
The weird thing about this report (at least how the paper shows it), is that D&B also looked at which bills had been actually been paid late in the previous 12 months. It seems that although only 20% of people said that the mortgage was the most important bill, in practice only 2% of people had paid the mortgage late. That compared with 20% of people who had paid the mobile phone bill late.
I’m sure there are economists that could tell you what all that means – personally I’m not sure I get why people would claim that their Pay TV is more important than their home when in fact it seems it isn’t!
What on Earth is ASB Bank playing at?
Filed under: Cost of living, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ, Retirement, Pensions and Kiwisaver
So, the Official Cash rate in New Zealand is at an all time low, and as of a few weeks ago was still dropping. There is no sign that the Reserve Bank of New Zealand is about to start raising the interest rate again soon.
So why would ASB bank raise their 3 and 5 year fixed interest rates by 0.5% yesterday???
It’s not as if they have ever passed anywhere near the full interest rate drops onto its customers. When I first took out my mortgage with them, there was about a 1% difference between the OCR at the time, and the rate I was paying. With the discount I got, it was even less than that. Currently – that 5-year rate gives a whopping 3.25% difference. Talk about creaming the situation.
It looks like the other banks are following suit.
So what does this mean?
It is not good news for anyone looking to buy a house. Not only does it look like the banks are refusing to allow us to have sensible interest rates, but we also now need 20% deposits. There just are not many people who can buy under those circumstances. A lot of UK migrants would be OK – assuming that they managed to get any money out of their UK property. (I am really grateful right now that my parents took a huge leap of faith in our emigration plans and sold their house when we emigrated here, which means they do not have to sell up now in an horrendous market and can just pack up and move).
It also means more uncertainty for people trying to organise budgets and living costs. With this move, it makes it even harder to work out whether to break a fixed rate, re-fix or stay floating. When banks put up their long term fixed rates – it tends to suggest that they think the OCR will start gong up. But will it? No one knows, and its getting harder and harder to make sensible decisions about your mortgage rates and to budget for them.
I’m really disappointed in ASB, especially as I found out yesterday that they will no longer negotiate on rates for their revolving credit mortgages. As they also no longer negotiate on their bank fees – I wonder why the still employ people in a “negotiations” department.
What do you do just in case things do go to hell in a hand basket?
Filed under: Cost of living, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ, Jobs & Work, Life in New Zealand
Irrespective of what I personally believe about what is happening in New Zealand financially or with jobs; there is no denying that people are scared. I may have a gut feeling that people do not need to be – but let’s be honest – it is hard to ignore all the headlines telling us “The Sky Is Falling”. It does sound as though you will be out of a job and on the street tomorrow.
So what can you do if you want to be prepared just in case the papers get it right – whether or not they base their assumption on something as silly as what happens in the US?
Well, in a meeting with my Bank Manager just before Christmas, I was told that the bank was figuring on another 2 years of pain before things start getting better. The length of time this “recession” will last depends entirely on who you ask – so I wouldn’t place any bets just yet. But as we talked over a few things: I figured: why not plan for the worst and hope for the best.
So – in addition to making sure I put as much money as I could into our emergency fund (IBM still haven’t sorted out Hubby’s Job Contract – despite the 15 mangers signing off on it), we are doing the following:
Paying as much as we can off our Personal Mortgage as fast as we can.
Not using credit cards if we can’t pay off the balance in full each month.
Watching our spending so that we spend significantly less than we earn.
Basically – exactly the same things that we do anyway.
If you don’t do these things already – now is the time to start. If you have credit card debt – make it a priority to pay it off as soon as possible. Throw any spare money at it you can. And cut up the card so you don’t add to the problem. Remember that credit cards in New Zealand charge a stunning 20% interest. And if you don’t already keep a close eye on your spending – then start.
Apparently the “economy” needs us to spend up large to keep it afloat. Well, the “economy” can cope without my money. It hasn’t had much of it for the past few years – so it won’t miss it now. If it wants it – it can reduce my fixed rate mortgage interest – and then i’ll think about it.
Avalon’s Guide The eBook is almost ready.
After some longer than anticipated delays – we finally have Avalon’s Guide in e-Book format. It should have been available for our January 4th Launch, so apologies for the fact it was not there.
Why Buy the E-Book?
- You don’t need to line your hallways with bookcases.
- You don’t need to wait for the book to be posted to you.
- You don’t contribute to trees being chopped down.
- You can read the book on your laptop (while still playing on Facebook).
- You can even read it on your iPhone (yes – we really do have one. In our defence – it was free).
And most importantly – given that I like moneysaving and budgeting:
It only costs $24.00
because I don’t have to cover printing costs, and you don’t have to pay for postage.
Of course – that is all in addition to the reasons why you should buy Avalon’s Guide in the first place:
- It’s written in plain (and occasionally funny) English.
- It’s packed full of financial information you really need to know, especially now.
- You will be reading about my own personal experience of dealing with financial problems and having to sort them out the hard way.
- You will learn simple and effective ways to handle your money – so that you have enough to last the month.
- You will learn ways to deal with debts and pay them off quickly.
- You will learn that investing for a future is not as hard as you might think.
- You will learn all about the house buying process, and mortgages.
- You will even find out some things about Kiwisaver that you probably were not aware of.
And for people wanting to move to New Zealand
1.You will get answers to the important questions that you have about moving to New Zealand. This is the stuff you don’t get answers to at the Emigration Expos.
2. I debunk the “no one comes to New Zealand to be Rich” myth, along with the “no one in New Zealand drives brand new BMW’s” and a host of other rubbish that is often said about life in New Zealand.
3. You will get a bit of perspective on the reality of life in New Zealand, rather than the hyped up marketing campaign that you usually see. It is neither “100% pure”, nor do we all live on the square root of diddlysquat.
4. The aim is to ensure that more migrants to NZ from the UK do not have to go home because they expected it to be dead cheap to live here and that they can cope on low wages because “they are non-consumers”.
5. I believe that there is “no one-true-path” to emigrating and personal finance – what works for one migrant won’t always work for you.
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