Mortgage Matters

Interest rate changes

What does it mean for you?

Mortgage interest rates have skyrocketed over the past two years, having a significant impact on many mortgage holders.

If your mortgage is due to expire off a low fixed term interest rate soon, you’re about to experience a significant increase in your mortgage repayments. For example, with a $500,000 mortgage fixed at 2.99% pa with a remaining loan term of 28 years, you’ll potentially be looking at an increase of around $260 per week.

How can you minimise the impact of rising interest rates?

Speak with a mortgage adviser to review how your mortgage is structured as there may be better ways to structure it that minimise exposure to interest rate increases. For example, splitting your mortgage over various amounts and terms will reduce the impact on your budget at each rate expiry.

You could look to extend your mortgage loan term to help reduce your regular mortgage repayments. This would require going through a full application process and it should also be noted this will be increase the overall amount of interest you’ll pay over the life span of your mortgage.

You can look to secure an interest rate anywhere from 60 days to 30 days BEFORE your mortgage fixed term expires, depending on which bank your mortgage is with.

You could look to consolidate any high interest loans, such as car finance loans, onto your mortgage, as mortgage interest rates tend to be lower. This will reduce and simplify your loan repayments.

To pay off your mortgage faster, you could try:

• making lump sum payments, either during or at the expiry of your fixed term (please speak with a mortgage adviser first to check if there are any penalty charges)

• increasing your regular loan repayments

• changing monthly loan repayments to either weekly or fortnightly (you will make more repayments during the year compared to monthly repayments)

• if interest rates have decreased when your next fixed term expires, keeping your repayments the same (as you’ll be used to paying this amount)

If you have an existing mortgage that is due to expire within the next three months, NOW is the best time to speak with a mortgage adviser. In the meantime, stay positive and remember that interest rates and inflation are cyclical.

Let’s chat! Contact Wayne Henry on 021 423 818 or email wayne@waynehenry.co.nz

Wayne Henry | Wayne Henry Mortgages

Wayne & Karen Henry are Millwater locals. Wayne is a financial adviser specialising in mortgages and Karen supports him with all admin related work. Wayne’s Disclosure Statement is available free of charge on request or can be downloaded via website https://www.waynehenry.co.nz/ wayne-henry-mortgage-adviser/

Whether starting a new business or running an established one, sometimes it’s hard getting up in the morning. This isn’t about the cold of a winter’s day, it’s about finding your energy spark. Daily you’re faced with solving issues such as losing a valued staff member; customers you can’t afford to lose changing the rules; your partner wondering if you love your work more… Finding the energy to solve issues will come when you know your ‘why’. This isn’t just corporate jargon and it’s really quite simple to do.

Tips to finding your own energy-generating ‘why’

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Chris is Chairman of Business Whangaparaoa and is a mentor with Business Mentors. He runs a locally focussed branding business. Design, Print, Sign, Web – tools and advice to help you grow your business bigger, or better. Get in touch via Chris@allbrand.co.nz.