Refixing or Refinancing?

It’s always worth talking to us – even if you have an existing mortgage it’s a good idea to have a regular mortgage review, to make sure you have the right option to suit your needs and that you are not paying anymore than you need to. Read more for  some common questions asked by people refixing or refinancing.

Q: What types of loans are available?

A: There are lots of different home loan options available. Each has different structures, rates, and fees. Our goal to find the best mortgage for your needs.

Some of the common ones are:

Table Loans:have repayments that remain constant at the level you choose. For the first few years, most of your repayment pays off interest and only a small amount is allocated to reducing principal. Over time, this changes so that later payments are mostly paying off principal.

Reducing Loans: your repayments change each payment period. Principal payments are constant, while interest payments gradually reduce. So your payments start relatively high and reduce over time.

Interest only: As the name suggests, on this loan, you only pay the interest - not the principal. Usually an interim measure, for example as bridging finance while another home is sold. Not advisable for most borrowers.

Transactional Loan:combines all your bank accounts in one - your savings and salary directly off-set your mortgage, reducing your interest.

Revolving credit: is a bit like an overdraft. Like a transactional loan, all your accounts are combined in one. Unlike a transaction loan, however, there is no forced reduction in your loan balance.

Q: What are different types of interest rates?

A: Floating Rate (or Variable Rate): Great for people who need the flexibility to make lump sum payments, or to repay the whole mortgage, without being committed to specific term or conditions.

Fixed Rate: Best if you like to know exactly what your mortgage repayments over a set period.

Capped Rate: This gives you the security of knowing what your maximum rate is, but if the floating rate drops below the capped rate, your interest drops too. And there's usually no penalty for paying off lump sums, repaying the whole loan, or for increasing re-payments.

Combination or Split Rate: Some people find this is the best of both worlds - the advantages of a fixed rate but with the option of making lump sum repayments if you want to.

Q: How can I reduce my mortgage - fast?

A: Try to increase the size of your home loan repayments whenever possible (if you get a pay rise, for example). This is really important in the early years of a loan when most of your repayments go towards interest rather than principal. (Each extra dollar counts!)
Make lump sum payments when you can. Remember to check the details of your loan payment to avoid any penalties!

Q: What does it cost to use a mortgage adviser?

A: For the majority of transactions there is no cost to you as we are paid by the lender or insurance company in the form of commissions. However, a minority of lenders on charge a brokerage fee to you and pass some or all of this fee to us.

Q: Which banks do you deal with?

A: We deal with most of the major lenders as well as number of second tier lenders. These lenders include: ASB, Westpac, National, ANZ, SBS, NZF, Liberty, Sovereign... to name a few.