Loan Market Takes on the Rate War

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The current competition and bank discounting has caused possibly the biggest rate war New Zealand has ever seen. When comparing today’s interest rates to just one year ago when interest rates where at least two percent higher, it seems nothing but good news, for mortgage holders and those looking to purchase. So is it really all hearts and roses or are there factors that you should be considering?

Loan Market Chief Executive Officer David Hart said whilst there are factors to consider when refinancing, such as your long term financial goals, anyone looking at getting a better home loan deal should look around at the potential savings on offer.

“We’ve waited a long time for lenders to compete like this for business and it’s unlikely we will see this scale of rate war again,” Mr Hart said.

Heightened competition between the banks certainly means there are some tempting home loan options currently on the market however there are some longer term implications you should consider before switching. One factor to evaluate is your need for stability to ensure that your mortgage is manageable for the future. Lender products and offers change regularly and independently of each other so the lender offering the best deal today may not suit you in the longer term.

It’s important to understand the costs relative to the potential savings of switching home loans. Comparing interest rates, fees and also features of various home loan products are among the most important costs and savings to consider.

If the thought of this makes you anxious you are not alone. Many home owners have not reviewed their loan because, as the saying goes, time is money. This is where I can help – whilst shopping around is essential, a professional mortgage broker can do the leg work for you.

Mr Hart said that the current competition wouldn’t last forever and could ease off as early as January 2013.

“If you haven’t reviewed your home loan in the last 12 months, there couldn’t be a better time. Doing a home loan assessment does not cost you a cent but in the long-run it could save you a lot of money,” Mr Hart said.

If you would like to discuss your home loan options, contact me today to arrange a free appointment.

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