When obtaining a mortgage in New zealand, interest rates play a crucial role in shaping your financial journey. At Twine Financial Advisers, we understand the impact of interest rates in your monthly payments, total interest paid over the loan’s life, and overall affordability of your dream home.
In New Zealand, a borrower can obtain a mortgage up to 30 years in length and throughout that period interest rates will undoubtedly change.
Key points to consider:
- Interest Payments
Interest rates are typically quoted as an annual percentage rate (APR), with calculations done daily and charges applied weekly, fortnightly, or monthly. Aligning the frequency with your budget management is essential. Every extra dollar above the minimum payment goes towards reducing the principal. - Mortgage Products
Different mortgage products like fixed loans, variable interest loans, lines of credit and offset loans are available. Our Mortgage Adviser will create a tailored loan structure to make the best use of the products available and methods to manage the interest rate risk.* (link to another blog on managing interest rate risk). - Loan Term
You can lock in a fixed rate for periods ranging from 6 months to 60 months (5 years). Short-term rates are influenced by the Reserve Bank of New Zealand’s policies, while long-term rates reflect market predictions. Our goal is to ensure your mortgage terms align with your financial goals.. - Negotiating Interest Rates
Interest rates are negotiated when you have a property under contract or when your loan is up for renewal within 35 – 60 days, depending on the lender. We provide informed insights into the economy, removing guesswork from your decision-making process.
At Twine Financial Advisers, we’re here to help you navigate the intricacies of interest rates and provide you with an effective loan structure that aligns with your financial goals.
