August 24, 2024 • 39 mins
Interest rates have been a hot topic recently, following the first OCR cut in years.
The question now at the front of everyone's minds is whether it's time for a long-term fixed rate to avoid any more uncertainty, or to hold off in the hope for more cuts to come.
Economist Ed McKnight joins Tim Beveridge on The Weekend Collective to discuss how you can haggle with your bank to get a better deal.
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Episode Transcript
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talk SEDB.
Speaker 2 (00:10):
And welcome back to the Weekend Collective. This is the
one Roof Radio show. By the way, if you missed
our fantastic panel with Mark Raisel on Pete wolf Camp,
you can check it out shortly pretty much by the
time the show is wrapped up, where we'll package it
all up shovel on the podcast and you can check
it out on iHeartRadio just look for the Weekend Collective.
But right now it's time for the One Roof Radio Show.
And my guest who's in the studio with me right
(00:31):
now is Ed McKnight gid Ed. How are you going?
Speaker 3 (00:34):
Oh?
Speaker 4 (00:34):
Great to be here, Tim, excellent.
Speaker 2 (00:35):
I keep forgetting to build Which company you are with?
And it is before I say the wrong thing.
Speaker 4 (00:40):
Ops partners.
Speaker 2 (00:41):
Oh that's right, Ops Partners, Opes Partner if you want
to partners, if you want to check it out. And hey,
by the way, congratulations because you have just got engaged
big news.
Speaker 5 (00:52):
Yeah.
Speaker 4 (00:53):
Now we're very excited. We're lucky. Angela said, yes.
Speaker 2 (00:56):
That that is always a positive thing. I think when
you pop the question so what what? Yeah, so what
tell us about how did you do it. I'm always
interested to see how people going and get well.
Speaker 4 (01:05):
I did it down in christ Church because that's where
we met, and I hide out the Austin Bar, which
is a little speaker easy underground bar. We met there,
we had all of our first dates there. Asked her
to be my girlfriend there, so I hired it out
and she actually thought that she decided to go there
because months in advance, I'd been dropping little hints, Oh
wasn't that a great bar. Oh they've got a new menu. Oh,
(01:27):
you really liked it there, just spaced out weeks apart,
and then we were going to be down there. She says,
we should go to the Austin Bar. I said, what
a fantastic guy.
Speaker 2 (01:36):
Fantastic, so was obviously she said yes, But I always
like the reaction to it was tell us about the
reaction and were you on your own or are your
friends there now?
Speaker 4 (01:45):
So I'd had her family, all of our friends upstairs.
I had it away ready for them to come down afterwards.
Speaker 2 (01:52):
So if it was a no, it would have been
it would have come down, down, come down.
Speaker 4 (01:56):
It would have been a bad awkward But I knew
it was going to be a yes. And in terms
of the reaction, I told her to come down to
Christchurch because we're going to have a friend's party for something.
And her reaction was, oh, my gosh, why did he
do it on the same day as this friend's party
when it's all about it's all meant to be about
(02:18):
his fiance. And then I had to say, no, no, no,
we're not going to that. That was a whole ruse
just to get you down here. And then you pop
the question and it was all happy days, fantastic, I
love and look it's you know, the world is full
of enough stress and things. I just think we've you know,
even though we're here for the property, how a little
bit of love to start off the show?
Speaker 2 (02:36):
Where you go?
Speaker 4 (02:37):
Now, let's talk astrights.
Speaker 2 (02:40):
Hey, congratulations Angela. If you're listening, I suspect you might be.
But anyway, anyway, ed interest rates now there's it. You've
you've been doing a bit of writing. It's appearing on
the One Roof website as well One Roof Dot Coat
in z Ed and of course this is a one
roof radio show, so it dovetails nicely on the whole
interest rates because I imagine people refixing mortgages and stuff,
(03:02):
and I have to refix literally on Monday. They've given
me you know that finally expires, and have had all
this notice and I wanted to wait for Adrian or
to decide what we were hoping was sticking out of
a side. But I've always felt that there wasn't really
much haggling to do or go to a more mortgage broker.
But you know, you've written a piece about can you
you know whether you can actually haggle for a better
(03:24):
interest rate?
Speaker 5 (03:25):
Yeah.
Speaker 4 (03:25):
So generally you see interest rates advertised by the banks,
and it might be at the moment like six point
five nine percent for a one year rate. Generally speaking,
you can get lower than that when you go to
a bank. Now, when you actually log into your app
or you get a call from the bank, they'll typically
offer you an interest rate that's slightly lower than than
that as a bit of an incentive to keep fixing.
(03:46):
Same with you, if you go to a mortgage advisor,
they'll be able to get a slightly lower interest rate.
For example, one of the banks at the moment is
advertising I think it is, so I'm going to get
it exactly. There is one for you. One of them
is advertising six point five to five percent, but if
you go how long for a year, if you go
(04:07):
on to the ban cap or you talk to your
mortgage advisor, they should be able to get your six
point three to five percent. So that zero point two
percent off the advertised interest rate. Why, well, that's just
what banks do. They will advertiser rate, but then there
will be a negotiated or a discounted rate in the background.
The big issue most of the time is that you
can't see what those are. So if you go onto
any Facebook group about personal finance or saving money, often
(04:32):
people will be posting the interest rates that they are
getting offered via the banks, because typically it is slightly
lower than the advertised rate. Now it does depend on
different rates, so more recently the two year rates they
fell quite a lot earlier in the year and so
there hasn't been as much discounting on those. There was
a lot of discounting on the one year rate earlier
(04:55):
this year. So for example, at one point most of
the banks were advertising seven point one percent, but they
were discounting down to six point eight five percent. So
it's quite difficult because those discounts are often hidden. That's
one reason why we started just publishing them and releasing
them on our website at open as Partner stock coded
and said just so that people know, oh, yes, sweet,
(05:17):
this is what a good interest rate looks like when
I'm actually offered it by the bank.
Speaker 2 (05:21):
Because obviously, if you are someone who's just bought a
house and you've got let's just go with a half
a million dollar mortgage. And I don't mean that casually
because it's a bloody lot of message. It's not funny.
You know, you look back in the years and pick
people on what sums that roll off the tongues of people,
So like, oh, I got it for one point one
(05:42):
there would have been twenty years ago people are going
one point one? What million? But anyway, half a million
dollar mortgage. If you're a new new mortgage mortgage mortgage jaw,
morg mortgage jaw, you're jaw. That's right. You have a
bit of you've got a bit of play, you've got
some something. You're looking for a mortgage. You can go
around the banks, and that's an obvious place where either
(06:05):
through a broker or your own efforts, you can haggle.
But what about the people, So, for instance, here's my one.
It says your mortgage is up under my app with
the bank come with it's ANZ. It's no trade secret.
I just National Bank when I was a student, bought
by an Z. That's how it goes. So obviously I've
never changed banks, but I did shop around when we
first got a mortgage. But now it comes up, you
(06:26):
need to refix your mortgage. What do you want? You know,
here's what we're offering you. I I must say it.
It doesn't feel like there's a lot of room for
haggling because of technology. It's like bingo, here's your offer,
Click on this, what do you want? Tick this box? Done. Yeah.
Speaker 4 (06:41):
Back in the day, there was a lot more ability
to negotiate because you might be talking to your local
bank manager. A lot of the time it's pretty set.
So some banks actually have rate cards in the background,
so they might advertise a specific rate, but then they
will send out discounted rates to mortgage advisors, which are
often available to people you know through their apps anyway,
(07:03):
that are slightly discounted. I suppose that just makes you
feel a little bit good when you go to locking
your mortgage. Oh, it's zero point two percent lower than
what they're advertising. Sweet, there's a bit of an incentive
to go ahead with them.
Speaker 2 (07:14):
Yeah, So I mean for me, is there any is
there any other way as opposed to just clicking yes?
Or should I say I want to speak to someone
and saying because what I'm thinking, And I'm making this
up completely as I'm going along, and if my wife's listening,
she'll be like, what do you mean how mortgage is
up for renew But part of me sort of thinks,
so I might just wait till Monday rolls around and
(07:34):
then say, well, you know, I'm looking at going to
another bank. What are you going to do? But I
don't know. If I be honest, I'm probably just going
to click the six months and wait for the interest
rates to keep dropping.
Speaker 4 (07:44):
To be honest him, if I was a banker, i'd
be calling your bluff there, because in order to refinance
to another bank, it's actually a bit of a process.
You know, you're going to have to go and put
it in a mortgage application for another bank. There are
actually costs to refinance. It usually costs about one thousand
dollars to move banks anyway, because then you've got to
go to your lawyer. The lawyer has to discharge the
mortgage being registered again the title, then they've got to
(08:06):
register a new one. So it's usually cost you about
one thousand bucks to switch anyway. Generally speaking, I would
not be You know, it's very difficult to shop around
interest rates anyway, because when you're a first home buyer,
banks don't like it when you go and apply to
five different banks to try and get the best interest
rate anyway.
Speaker 2 (08:23):
So the answer is you can't really haggle. Just it's
very difficult click the button. I mean actually saying can
you do a bit? Is it actually worth trying to
get a bank representative on the line and saying, look,
I do have to fix this. But you know, you
can bluff and say I'm looking at paying it off
because of some money that's coming, or I'll keep it
going or whatever. But is it worth just saying, hey,
is this the best you can do?
Speaker 4 (08:43):
Does it work in some rare instances I have heard
at work sometimes though, a lot of bankers have to
stick to script. So for example, I had Westpac call
me up the other day. They offered me a rate.
I said, I know for a fact that is quite
a bit higher. I think it was about er point
one higher than some of the other banks, and the
(09:03):
very nice gentleman said, well, that's the we're offering you.
Speaker 2 (09:07):
So that's like that. You know what, maybe they should
have in their script listen like it or lump it
buddy if they said that something. Respect Thank you for
your honesty. So what advice do you have for people
when it comes to shopping around? Is it better to
I mean, what's the role of Most of the people
(09:27):
who come on our show would say a lot of
the time, and the received wisdom is get a mortgage broker.
Just get someone else to sort it for you.
Speaker 4 (09:33):
Yeah, the truth of the matter, and I agree with that.
But the truth of the matter is generally mortgage advisors
aren't going to be able to get a substantially lower
interest rate than you could get yourself. So generally you
don't go to a mortgage advisor because they're going to
be able to get you a lower interest rate, but
that they're going to be able to help you get
your mortgage approved anyway.
Speaker 2 (09:50):
Right.
Speaker 4 (09:51):
What people don't realize is that when you put in
your mortgage application to the bank, there are a lot
of moving parts that you can pull in order to
get your mortgage a higher likelihood that it's going to
go ahead and get approved. I'll just give you one example.
So let's say that I have my own home, I've
got a mortgage on it, and I'm paying it off
(10:12):
over ten years. I decide to go and buy an
investment property. The bank says, no, you can't afford it
yet in comes too low. Well, one thing a mortgage
advisor might say is, well, that's because you're paying your
mortgage off over ten years. For instance, if we extend
that term out to thirty years, then your minimum repayments
to the bank will look quite a bit lower, and
(10:32):
therefore they might then approve that mortgage investment property. Now,
you can still pay off your mortgage over ten years,
but if you document it or structure it such that
it's over thirty years, even if you pay it off faster,
you might get that investment property.
Speaker 2 (10:46):
It's proved. With most mortgages. You can pay every I
think when you have refixing rates, or you can pay
off a chunk every year, or something can't you isn't
there some ex bank could be different. My understanding was
you could pay five percent off the lump every time
you re refix.
Speaker 4 (11:01):
Generally, it's generally it's five percent even if you are fixed,
and they won't charge your penalty your when your interest
rate comes up for a newle as yours will you're
going to move on to a floating rate. You could
pay it all off then without penalty at that at
that point because it's floating.
Speaker 2 (11:17):
Okay, right, So what would your advice be? Not specific advice,
and I'm not going to quote you, but I have.
Speaker 4 (11:21):
To well for you. Well, that leads to a really
good question about which interest rate do you choose? And
there's actually a bit of math involved and I've just
run the numbers, right, So one thing you'll probably think,
he is, should I go for the six month rate
or for the one month for the twelve month rate
the one year rate? And what I've calculated is based
(11:42):
on the you know, it's kind of six point four
to five percent for the one yet it's about six
point eight five percent for the six month. The rates
on your app which I see that you're you're tapping
away on your phone, they're probably slightly lower because they'll
be giving you negotiated rates also.
Speaker 2 (11:57):
Equity as well. Yeah, and there's two different rates. If
you've got eighty percent, you know you own more than
twenty percent of your equity, then you get a better.
Speaker 4 (12:05):
The truth of the matter is right now for the
six month which is slightly higher. For that to make
sense in six months time, the interest rate you could
get that you get has to be six percent or
lower for it to make sense to choose the higher
rate right now, which is six months. And so the
question that you've got to then ask yourself is do
I think in six months time that I'll be able
(12:28):
to get an interest rate lower than six percent? And
based on ain Z's current forecast, they reckon that the
one year rate is going to be about five point
six percent in six months time at around that February March.
Over the next twelve months, if that was correct, it
might save you about twenty five dollars a week.
Speaker 2 (12:46):
Well, here's the tricky one with what A and Z
are doing. And if you're listening, actually, by the way,
want your calls. How do you approach refixing your mortgage rate?
And do you try to shop around? Do you try
and call up a bank manager and say, listen, can
you save me point one of a percent here on
my mortgage is five hundred thousand. It's got to be
worth it to you, guys, please can you help me?
What can you do? I don't know if that I
would assume that that approach is worth trying. But here's
(13:08):
the interesting thing on the choice that I might have
right now six point eight five percent for six months. Right.
Speaker 4 (13:13):
Oh, so they're only offering you what the advertised rate is.
That's interesting.
Speaker 2 (13:17):
Yeah, it says standard rate seven point four to nine.
But oh, okay, is this something I need to know
from you anyway? I'm going to talk about that within
the break. But here we go eighteen months five point
nine to nine, and you would think over eighteen months
if to me, that's almost if you're happy just to
tack onto an eighteen month contract, that's an interesting equation
because you've got a bank on that six point eighty
(13:39):
five dropping down to a bit less than five point
nine nine for it to be worth worthwhile or not,
wouldn't it.
Speaker 4 (13:45):
Yeah, it's interesting. There are other banks offering an eighteen
month as well as five point nine percent. It's not
currently being advertised, but behind the scenes we have a
little chatter in the break about a month anyway.
Speaker 2 (13:59):
How do you go about refixing your mortgage, and do
you try haggling or do you feel in this age
of technology, everything's presented to you on this plate on
the app and it's all sort of locked and loaded,
and I guess I just have to click this button.
Is that the approach you take? What do you call
your mortgage broker and say what can you do? Because,
as we say, if you need to refinance, you've got
to go to the lawyers, you've got to get new
(14:20):
documents drawn up and all that, and it's not that straightforward.
So maybe that's what the banks know. When you mortgage
is getting down, maybe it's not worth it. Give us
a call one hundred eight ten and eighty want to
know your tactics text nine two nine two. My guest
is Ed McKnight from O Pears Partners. That's opes is
how they spell it as opposed to ops ops. What
does it sound like an old cartoon character from the fifties,
(14:41):
isn't it? I'm thinking of op or something like that. Anyway,
that's completely irrelevant, opeas Partners, twenty one and a half
past four News Talks, EDB and welcome to back to
news Talks, heb. This is the one roof radio show
on the weekend collecting. My guest is Ed McKnight from
opeas partner's talking about how do we negotiate or can
you negotiate your interests?
Speaker 3 (15:00):
Right?
Speaker 2 (15:00):
Once you're howked in there? You know you're hooked in
with that bank and it's like they've got you and
just click into the app. Can you do you have
any other power? Or how do you shop around for
your interest rates? We've got lots of other things weren't
talking about when it comes to that sort of thing
and the incentives that banks off of you and whether
the cash back incentives are worth you know, worth going
with the bank for that reason. My guess is even
night as I saying we're going to dig into that.
(15:21):
But first Eric, Hello.
Speaker 3 (15:23):
YEAHI guys. You know, I'm just talking to you guys
from a perspective that I've paid off my mortgage.
Speaker 2 (15:29):
You have good Yeah, Eric.
Speaker 3 (15:32):
On my forties, I paid it off. But you know
I only started in my thirties. But I used the
system that a lot of people aren't talking about these days.
And I'm just lexit guy who never got at school,
c who was classed as thick as pig shirt.
Speaker 2 (15:48):
But yeah, we might try and just soften our language.
Given it four thirty in the afternoon and there are
people driving around with the kids in the car.
Speaker 3 (15:55):
Yeah thanks, Eric, Yeah right, but yeah, you know what
I'm saying is you don't have to be an entrepreneur,
you know, with a degree to to figure it out.
It's pretty straightforward stuff. They're definitely and talk to your banks,
your bank and see if you get a cheap interest rate.
I did that every single time I refixed my mortgage.
Every single time, I'd say, look, can you do a
(16:16):
bit of better job and a better price than that?
And that they'd usually done, knock a little bit off.
So that was one thing. The other thing was your
mate there, I don't.
Speaker 2 (16:26):
Know his here night.
Speaker 5 (16:31):
Yeah.
Speaker 3 (16:31):
The Flexi loans, the Flexi loan system, Yeah you did that.
Speaker 4 (16:35):
Yeah, you're dead right, Eric. So what you're talking about
there is either offset facilities or revolving credits is the
other thing that people do. And Eric, just tell us,
how are you using the flexi system in order to
pay off your mortgage faster?
Speaker 3 (16:48):
Okay, So I didn't use the revolve and credit credit
system because I didn't like I didn't like credit cards
for starters. So but I know how that works. You
basically put all your month, you live off your credit
card for a month. It's a separate It's just like
a flexi loan. Is you've got your whole line. Let's
say your loan as five hundred thousand, right, so you
put your whole entire loan over the longest longest time
(17:11):
possible that make it affordable for yourself. But take a
portion of that loan, like twenty grand, and stick that
on what they call the flexi loan.
Speaker 2 (17:19):
Yeah, it's like a draw down facility type of things.
Speaker 3 (17:21):
Basic distant overdraft, but you can draw it back and
put the money back. You know, you can draw the
money back if you need it. So what I did
is I had a separate account. They had an overdraft
of twenty grand, and I poured any savings I had.
I didn't have it as savings in the bank, because
savings in the bank to me was stupid because you're
only getting two percent off your money. So I took
(17:42):
all my spare money and I stuck everything on that
flexi loan because I knew I could get it back.
But I'm technically now getting five percent because I'm not
borrowing that money every month off the bank. If I
put two thousand dollars in there, that's two thousand dollars
I'm loaning to myself, which means I don't have to
pay five percent on it now. Over the period of
your mortgage. That adds up to a lot of money,
(18:03):
because the banks calculate your entire mortgage for thirty years,
and they calculate all the interest on it, and they
calculate how much interest you'll pay if you can knock
that down. So every time the loan came around, what
I do is I would have got that mortgage down
to say that flexi loan may be down to say
down ten grand or whatever. In two years or whatever,
(18:23):
it may be twenty grand, and I take that money
that I've got it down, and I take that overdraft
back up again and dump all that money back onto
the main mortgage.
Speaker 4 (18:34):
Yeah, and Eric, this is such a great strategy, and
my book Wealth Plan, we call it the mortgage buster strategy.
Speaker 3 (18:39):
Which is a little right.
Speaker 4 (18:41):
Yeah, Well, certainly do your situation. But what we're really
talking about is if you move some of your mortgage
across to a revolving credit or a flexi facility, and
then if you've got money saved for a holiday or
invested somewhere else, you might pot it into that facility.
You've still got access to the money for your car
appairs or for your holiday, but in the meantime, it's
saving your money.
Speaker 5 (19:01):
Now.
Speaker 4 (19:01):
One thing that I do want to talk about it.
I'm not sure if you've seen these Facebook AD's either, Eric,
there are a number of mortgage advisors out there saying
at the moment, you can pay off your home loan
and five to seven years, no extra repayments needed. That is,
and I won't use one of the words er accused,
but that is incorrect. That's not true. You can't pay
off your mortgage without making additional repayments. But you can
(19:24):
do some of the stuff that Eric's talking about here,
which can save a lot of interest.
Speaker 3 (19:28):
I was taking all like what I was doing right,
I was saying, Okay, I'll live off what I can.
So I've been a cheapy just living.
Speaker 2 (19:35):
Can I ask you just quickly how long ago was this?
Speaker 5 (19:38):
Oh?
Speaker 3 (19:38):
Okay, it's probably ten years ago now. But the fact
of the principal is still the same, Mate, and the
system is still there. But a lot of people don't
understand it. We need to go to the bank. The bank,
the teller isn't that and the managers to say, you're
one of the very few people that have actually used
the system to your advantage and literally cut on mortgage
in half.
Speaker 2 (19:58):
Yeah, well done, Eric, I mean the whole revolving credit thing,
the flexi loan, whatever they want to brand it, which
tells them it is probably what the ANZ actually because
it sounds like a familiar expression. It's basically, if you've
got extra cash that you're playing with for your life,
if you are lucky enough that you are, you have
a lifestyle where you build up resources and you you
better to stick that into a flexi loan because at
(20:19):
least you're getting the benefit of not having that off
your mortgage.
Speaker 4 (20:22):
Yeah, and if you compare putting money into your mortgage
versus a term deposit. Remember, if you put ten thousand
dollars into a term deposit, you might get six percent.
Then you've got to pay tax off that, so your
returns really four percent. If you stick it against your mortgage,
you're actually getting that, you know, six or seven percent
savings on there. The key thing is to do what
I think Eric was talking about, which is when you
have that flexi facility and you're putting money in there,
(20:45):
make sure you don't spend it. One of the things
some people do as they start putting their money into
their revolving credit or their flexi facility, then they feel
rich because they've got that money available there, and then
they go and spend it and they don't actually pay
off their mortgage faster. That's one of the classic fish
hooks that we see.
Speaker 2 (21:01):
I'm always amazed at how many This is slightly off topic,
but when interest rates get down and people go and
borrow a truckload more because to buy that car they've
always wanted, It's like you just, I don't know that.
The willingness of people to get into debt when it's
maybe not that necessary sort of always surprises me.
Speaker 1 (21:19):
Yeah.
Speaker 4 (21:19):
One classic way that kiwis funds their lifestyles, whether to
buy a boat or a new car, or a bike
or a jets key, whatever it happens to be, as
the old home loan top up, just go and borrow
a little bit more money against the house in order
to be able to pay for that. Not always the
best financial decision.
Speaker 2 (21:35):
No, Hey, what about now? Cash back offers. So you're
looking to either refinance or you're going to get your
first mortgage, and obviously banks have a lot of incentives.
I think I've even seen things where you can get
a holiday or something if you holiday to the Gold
Coast or something if you sign up with us, which
to me, I always think suspiciously, somehow I'm paying for that,
(21:58):
even though it feels like it's something they given me.
But anyway, cash backs are they ever worth while using?
Because well, hell it's a bit of extra cash in
your pocket and you've done the business.
Speaker 4 (22:10):
Yeah, I think cash banks are definitely worth it from
the banks, and just for anybody who maybe hasn't got
a mortgage recently doesn't know what those are. Let's say
you take out a half a million dollar mortgage, and yes,
it does roll off the tongue easily, doesn't it. Till
so you take out your half a million dollar mortgage.
Generally speaking, at the moment, banks are offering between zero
point eight percent and up to one percent as a
cash back. So that means you take out that half
(22:32):
a million dollar mortgage and when you draw it down,
they will put four to five thousand dollars into your
bank account. You can spend that on anything. Generally that
it pitchres a way to help cover your legal fees,
because when you are a first home buyer and you
take out a mortgage, there's a lot of costs with that.
If you refinance, like you switch banks, as I said before,
(22:54):
could cost you about one thousand dollars. So it's a
way to help cover some of those fees. But if
it only costs you call it one thousand dollars to
move banks, and they're giving you four thousand dollar, then hey,
it's a little bit of three grand profit there.
Speaker 2 (23:08):
Okay. But see I just sort of think, oh, well,
if you're going to take that cash, you should really
just stick it off against your mortgagehouldn't you.
Speaker 4 (23:16):
Well I think many people possibly do that, and I
think that's probably a very good decision. I'm sure some
people are out there bettering on whatever they want to.
Of course, there are a couple of fish hooks with
cash backs that we need to be aware of. Generally,
banks will make you stick with them for two to
four years if you are going to get a cash back,
and let's say they say, right, Tim, we're going to
(23:37):
give you a cash back, but you've got to stick
with us for three years. If you try and leave
them one or two years early, they'll make you pay
some of that back. Same as if you know, let's
say you take out a big mortgage, they give you
a cash back, then you decide to pay it all
off because you've got an inheritance, you might have to
pay some of that.
Speaker 2 (23:53):
Actually, that is, if they're giving you one percent or
something that's close to whate that's a lot of money
when you consider the interest rates.
Speaker 4 (23:59):
I think it's a lot of money. And one interesting
thing that I'll tell you about that we've recently seen,
because we've got a team of mortgage advisors at Open's Partners,
we've seen retention cash. This is something that's a little
bit new. So you've said that you've been with A
and Z for a long long time, and A and
Z knows that if you decide to walk across the
(24:19):
road to ASB or Kiwibank or something like that, they're
probably going to give you a cash back. Now, some
banks are offering retention cash, which is if you decide
that you're going to refinance to somewhere else to get
that cash back, why don't we just give you a
little bit of cash instead and you stay. Now, retention
cash is generally not as generous as a cash back.
(24:41):
It might be somewhere between zero point five to zero
point six percent. But the benefit then is you don't
have to pay the one grand to the lawyers, So
it works out to be slightly less, but there's less
faff to go through. But that's one other thing to
talk to your mortgage advisor about. Just before you jump
in Tim and say, well, where's my retention cash offer
from a sid?
Speaker 2 (25:00):
Really my expression there, I don't think I'm getting a
retention for my mortgage.
Speaker 4 (25:04):
No, But that's because you did tell me that your
mortgage is quite small. Generally these only cacking for loans
about two hundred k or more.
Speaker 2 (25:10):
Yeah, just that rolls off the tongue, doesn't it. Yeah,
half a million, two hundred thousand, isn't it?
Speaker 6 (25:15):
Funny?
Speaker 2 (25:16):
In every other aspect of our lives, the big money,
we treat it importantly with the mortgage. My mortgage is
down to three hundred thousand. Oh lucky you. Anyway, Hey, look,
we want to take your cause on this. Do you
haggle with your bank or how do you approach refinancing,
or do you just go with the technology. It clicks
on your screen and there we go. Apart from okay,
(25:36):
here's one that says, apart from Heartland, who charged like
bulls allegedly, I guess are there other options that can
free up equity for the mortgage free, asset rich, cash
poor elderly. That's from Chrissy.
Speaker 4 (25:50):
Oh, so here we're talking about reverse mortgages and Heartland
are one of the leaders in reverse mortgages in New Zealand.
And I don't purport to be an expert, but just
to explain that for any people out there who are like, oh,
what's a reverse mortgage? So let's say that you're seventy
years old, you're struggling to just live off super You've
spent your key, we say her, and you've got this
(26:10):
mortgage free house. But you've got so you're quite rich
in asset terms, but you don't have a lot of income.
That's where Heartland and other reverse mortgage providers will say, okay,
we'll give you fifty thousand dollars and you don't have
to pay that off until you sell the house or
you eventually pass away. And then they sell the house
and you pay it back. Now, that sounds really good,
(26:32):
but there's a lot of interest in there because you're
paying quite a high interest rate.
Speaker 2 (26:36):
I think, well, it's basically taking your kids inheritance if
you've got kids, isn't.
Speaker 4 (26:40):
It sort of Yeah, but how much do you love
your kids?
Speaker 2 (26:42):
Team Well, a lot, of course. Actually it's something about that.
But of course you've got to also live, don't you.
So it's a difficult decision for a lot of people.
Speaker 4 (26:53):
Yeah, a couple of things in there, because I just
did a podcast about it on the Property Academy podcast,
and one thing that my co host Andrew was talking
about was he had a client who was thinking about
going and getting a reverse mortgage, but then their kids
were worried about their inheritance side. So what the kids
all decided to do was, why don't we all do
a mortgage top up give them money to mum and dad,
(27:16):
because they're going to be able to borrow at a
much lower interest rate than a reverse mortgage would. Because
a reverse mortgage, I'm pretty sure I don't want to
get an angry call from Heartland, but I think it's
about ten percent was the interest rate that they've been using. Yeah,
giving me a face. Yes, it's quite high.
Speaker 2 (27:33):
Yeah, that's quite up there, isn't it. I'm surprised there's
not more competition for the banks for the reverse mortgages.
Do you think we'll ever get a bit more like that?
Because when that person text about Heartland, it's almost that's
one of their things they advertise all the time, isn't it.
Speaker 4 (27:47):
It's a very specialist kind of mortgage type. So I
don't know whether there's any better deals out there than Heartland.
One thing that I will tell you, because I interviewed
them for that podcast, I was quite impressed with some
of the safeguards that they've got in place to make
sure that people don't take out too much debt.
Speaker 2 (28:03):
Now, well that's well, that's good. I guess that's probably
because of the way our laws are crafted around lending
and responsible lending too, isn't it.
Speaker 5 (28:10):
Yeah.
Speaker 4 (28:10):
I think the definitely want to be a responsible lending provider.
Speaker 2 (28:14):
Yeah, okay, here's another one. Lots of text questions. If
you got a call, you've got a question for Ed
McKnight around how you approach how you should approach We're
not going to specific financial advice, of course, but you're
looking to remortgage or finance and haggling over interest rates.
Can you do it? Give us a call? Oh, eight
hundred and eighty ten eight eight. Somebody said, what do
you think about SBS offering five point five nine percent
(28:35):
lowest rate advertise in the country and no one seems
to talk about it? Extremely competitive, writes this person, who
I don't know if they work for SPS, but it
would be a good move for them to have texted that.
Speaker 4 (28:45):
So you were saying five point five to nine oh
for the first home combo, as I've just seen on
interest stock coder in Zin. So it looks like that
for a one year, they've got the first home combo.
To be honest, I don't know much about that specific offer.
Speaker 2 (28:57):
Okay, okay, So we're not going to comment about that.
Speaker 4 (29:00):
I'll dig into it.
Speaker 2 (29:01):
I'll dig into it another time. If banks don't like
clients shopping around and apply to applying to multitudes and
banks for loans, as your guest says, and look to
punish those that do, I'm sure they look to punish
those that do, do they surely that's oh, somebody's wondering
if they look to punish those that shop around. I
don't think they do that. No, So what I'd say,
they just don't incentivize as much as well.
Speaker 4 (29:23):
It's not preferred because the trouble with applying for a
mortgage is that there's lots of people trying to do it,
and if people go and apply to every single bank,
then it slows everybody else down because you've got a
big traffic queue in terms of your mortgage applications. So
certainly what some people borrowers get frustrated about is if
you go and talk to a mortgage advisor and you say,
(29:44):
go to every single bank and try and get me
the best interest rate. A mortgage advisor will not do that,
and the reason is because the banks don't like doing
that because it slows everybody down in terms of a queue.
I'm not sure whether a bank goes ahead and punishes it,
but what I will say is that if you go
out and apply to a number of banks, that will
show up on your credit report, and then that will
(30:05):
times make banks nervous because if they're saying, well, you've
applied to four other banks, why are the other banks
saying no?
Speaker 2 (30:13):
Okay, yeah, okay, that's interesting advice there, yeah, or point
to observe yet it's twenty minutes to five news Talks.
You be back in just a moment. My guest is
ed mknight. This is the week in Collective One roof
Radio show at twenty minutes to five and welcome back.
I love a little bit of our easy into one
of our sessions at the one roof Radio show. My
(30:33):
guest is Ed McNaught on Tim Beverage and let's take
some calls talking about interest rates, taggling for you know,
your refinance with your new mortgage. Neil, Hello, Yeah, Hi
guys are good.
Speaker 5 (30:44):
Thanks so you I had quite a question with my
wife and I have done really well over the years
and actually quite enjoy playing around with our mortgage and
looking at the options available. So I've been enjoying the
conversation today. However, over the years we've always thought, hey,
we want to deal directly with the bank. However, then
you know they don't do what we want and we
(31:06):
hear these guys are getting better deals, and then you
know the advice is, hey, go to a broker, they
can get a better deal. Brokers have a backdoor that
I can't access as a regular guy. Or what's the story.
Speaker 4 (31:17):
Oh, the question such a great question because there's often
quite a few misconceptions here. So a lot of people
think that mortgage brokers can get a lower interest rate.
Generally speaking, that's not the case. Whether you go directly
to the bank or you use a mortgage advisor, the
interest rate's probably going to be the interest rate. The
real value in a mortgage advisor is setting up your
(31:38):
lending the right way. So, for instance, if you were
going to go ahead, Neil and buy an investment property,
one of the key strategies we often talk about is
split banking, which is effectively cheating on your bank using
multiple banks at once, and mortgage advisors are really good
about setting it up the right way so it is
the most tax efficient way for you to do it,
and also setting up your mortgages so that when you
(31:58):
want to go and buy your second investment property, hey,
look it's all set up so you're able to go
ahead and do it. So the best deal is probably
correct in terms of setting it up the right way,
making sure you're able to get the lending that you
are wanting, that you get your mortgage approved, But in
terms of best interest rate, I don't really think that happened.
Speaker 2 (32:17):
Although some mortgage some mortgage brokers have specific relationships with
banks who may offer them a slightly better rate. Isn't
that right?
Speaker 4 (32:24):
Well, generally we talk about the advertised rates and the
negotiated rates. Now, the negotiated rates mortgage advisors have access
to because they know, you know, what other customers or
borrowers have been able to get. But generally the bank
will be able to offer you the same rates that
a mortgage advisor would be able to get. That's the
truth of the matter.
Speaker 2 (32:45):
Actually, funny enough, I spoke to the guy who helped
us with our mortgage and gave McCall and said, look,
I'm refinancing. Should I do it through you? And he
said what rate of the bank going for? And I
told him and he said, just go with that, don't
worry about it, you know, just save me the hassle
of it, so, which was quite helpful. Actually, right, Let's
take another call Sue.
Speaker 6 (33:03):
Hello, Hello, how you doing good?
Speaker 2 (33:06):
Thanks? Where you go?
Speaker 6 (33:09):
Yeah? Cool? Hey, strategy. I don't know that you've said
it or not, but for me and we're just refinancing
at the moment. Definitely, I wouldn't look at changing banks
because of simply the legal costs, et cetera, and the drama.
But I definitely would work towards what can I afford
for the next period of time? So is it six months,
(33:30):
is it a year? Is it eighteen months? And that
would be one of the big drivers, not.
Speaker 2 (33:36):
Just what is the interest rate, so more thinking about
how can I plow off as much money as I
can and structure it that way, And that's worth you know,
worth more than haggling over an interest rate.
Speaker 6 (33:47):
Well that plus plus how how stressed am I going
to be if I if I say I'm going to
fix for six months and then the interest rates unconceivably
go up, then I'm going to be screwed. Whereas if
I fix for twelve months, then and I know that
that's my spending for the next time months, And it's
a good strategy because that way, it's a little bit
(34:09):
like having a high purchase that you not gonna have them,
but then you know the amount that you're gonna pay
every week. It's that solid.
Speaker 2 (34:19):
Yeah, that's a good point, isn't it. So the sou's
basically saying the attitude to your mortgage and paying it
off quicker, it's going to be worse than trying to
save point one percent or something, just pay it off.
Speaker 4 (34:28):
It's outrageous the amount that you can save on your
mortgage if you just pay a little bit more than
the minimum repayments. And I think that's such a good point.
Speaker 2 (34:34):
So yeah, in fact, you can go and do just
it's worth doing comparison calculations. How much more and how
much am I paying on my mortgage if I go
for the extra five years or whatever, and seeing the
massive difference, and you think how many overseas holidays is
that they can blow it on? Anyway, Hey, thanks for
coll So we'll be back in just One roof. Property
of the Week is next. It's twelve minutes to five
Newstalk sd B and welcome back to the One Roof
(35:01):
radio show. That music is completely incidental and no comment.
My guest ed McKnight from Opius Partners, and it is
that magic time of day though it's eight minutes to five. Yes,
and the one we property of the week is well,
it's a in Buller. It's a Fox River Buller five
(35:22):
seven seven O State Highway six. You can look it
up on the One Roof website. And it is a
second where I just click on the screen. Here it's
got an asking price at one point six million. It's
three bedrooms, two bathrooms, five car garage workshop. It looks
like it's set on Here's the thing fifty acres with
two separate titles that you can profit from while I'm
enjoying yourself. It says entertaining decks, a spar pool, a
(35:45):
fire pit. It looks like it's a house as well
as a sort of separate and airbnb. In fat one
of their photos, it's got a lineup of the crayfish
that they've probably caught nearby. It's so it's yeah. It
talks about an eighty one square meter garage or workshop
space surrounded by avery than The West Coast is known
and loved for crayfish, hector dolphins, two e's and gorgeous
native bush. Interestingly ed which you noticed when we were
(36:07):
chatting about it in the break. It's been listed for
a little while. It's been on the market for a
little bit, so they'd be wanting to get rid of it.
I guess.
Speaker 4 (36:13):
It was launched on December twenty twenty one, updated twelve
days ago. This is always something to look at when
you're purchasing properties because That tells you if they've updated
the listing, maybe changed the sale process, moved to maybe
an asking price where in the past it might have
been been priced by negotiation. That's a little bit of
a signal that there could be a deal to be
had because that updating the listing. They're like, oh, we're
(36:35):
having some conversations about it, and it's.
Speaker 2 (36:38):
Quite a spectacular looking property. I always get so every
week when we have it, I say, it's like taking
a mini holiday, just going to have a look at
someone else's house. But what a beautiful area.
Speaker 4 (36:46):
Stunning, isn't it one point six million dollars in Buller.
I thought you might be able to buy half the
West Coast for that, And we've just.
Speaker 2 (36:54):
Been such an Auckland's statement. We've just to sell. I
can sell my house in Auckland and I could buy
half the West Coast.
Speaker 4 (37:03):
We're going to get a lot of agri callers now.
Speaker 2 (37:06):
Actually it's a gorgeous link property though those views look
absolutely magnificent, don't they.
Speaker 4 (37:11):
And beautiful part of the country down on the West coast.
Speaker 2 (37:14):
Yeah right, Muzz says, holy something. I can't say what
he's saying, but he's moving to buller. I'm guessing Muzz
lives in Auckland and he's worked out that he can
cash up. We've got time. Maybe we've got time for one.
Actually no, here's a quick text here. Hi, Tim, can
you tell me how much commission mortgage brokers get and
how does that work out in the whole equation?
Speaker 4 (37:34):
Yeah, generally it's zero point six percent of the mortgage value.
So let's say that it's half a million dollar mortgage,
it might be a three grand commission.
Speaker 2 (37:43):
O excellent, Right, let's squeeze one another caller, Josh today.
How's that? Fellows? Good? Thanks? You got two minutes.
Speaker 3 (37:51):
Let's good.
Speaker 2 (37:51):
Hey, I'm in my love her twenties and I've got
a question for you guys. I'm probably going to be
in the housing market in like five to eight years.
Whether you think it's going to be then? Do you
think they're going to be better or worse? Or oh
what do you mean? More expensive?
Speaker 4 (38:05):
A straight?
Speaker 3 (38:05):
Oh? Five years?
Speaker 2 (38:06):
Your thoughts on the market? Big core for prediction. Because
I know nothing about property, don't listen to me. I
reckon it's going to be maybe a point lower than
it is now.
Speaker 4 (38:16):
To be honest, I wouldn't know I wouldn't even be
willing to guess five years out. I'd guess three years
out and say I'd expect them to be low. But
the issue is that the long run OCR is kind
of two and a half to two point seventy five percent.
That suggests that the one year interest rate might be
about five percent when the reserve banks neither trying to
speed up or slow down the economy. But there's going
(38:39):
to be some world event that happens in the next
five to eight years, whether it be another COVID or
something's going to happen that's going to screw with interest
rates because the economy is constantly responding. So I wouldn't
even have a guess at what it's going to pen
five to eight years. It's too far out.
Speaker 2 (38:52):
How's your saving going, Josh, how's Australia? Now, how's your
saving going?
Speaker 3 (38:58):
Not?
Speaker 2 (38:58):
How going good?
Speaker 3 (39:00):
Yeah?
Speaker 5 (39:01):
How's Australia.
Speaker 6 (39:03):
Yeah, savings are going good.
Speaker 2 (39:07):
Yeah, there are a few people are heading off to Australia,
probably because they see that as a way of saving
and maybe never return. Hey, ed, great to have you
in and see Nice to see your piece on the
One Roof, One Roof website. And yeah, and of course
you'll get your podcasts that you do daily. I think,
isn't it.
Speaker 4 (39:22):
Yeah, the property can be podcasting. Go and check out
that interest rate cut counter on the one Roof website.
It's excellent, excellent.
Speaker 2 (39:29):
Right, we will be back with the Parents Squad. We
have a brand new guest on the show, very exciting
and her name is Kim Harvey and she'll be in
the studio with me very shortly. It's four minutes to five.
Speaker 1 (39:43):
For more from the Weekend Collective, listen live to news
Talks'd be weekends from three pm, or follow the podcast
on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talk SEDB.
Speaker 2 (00:10):
And welcome back to the Weekend Collective. This is the
one Roof Radio show. By the way, if you missed
our fantastic panel with Mark Raisel on Pete wolf Camp,
you can check it out shortly pretty much by the
time the show is wrapped up, where we'll package it
all up shovel on the podcast and you can check
it out on iHeartRadio just look for the Weekend Collective.
But right now it's time for the One Roof Radio Show.
And my guest who's in the studio with me right
(00:31):
now is Ed McKnight gid Ed. How are you going?
Speaker 3 (00:34):
Oh?
Speaker 4 (00:34):
Great to be here, Tim, excellent.
Speaker 2 (00:35):
I keep forgetting to build Which company you are with?
And it is before I say the wrong thing.
Speaker 4 (00:40):
Ops partners.
Speaker 2 (00:41):
Oh that's right, Ops Partners, Opes Partner if you want
to partners, if you want to check it out. And hey,
by the way, congratulations because you have just got engaged
big news.
Speaker 5 (00:52):
Yeah.
Speaker 4 (00:53):
Now we're very excited. We're lucky. Angela said, yes.
Speaker 2 (00:56):
That that is always a positive thing. I think when
you pop the question so what what? Yeah, so what
tell us about how did you do it. I'm always
interested to see how people going and get well.
Speaker 4 (01:05):
I did it down in christ Church because that's where
we met, and I hide out the Austin Bar, which
is a little speaker easy underground bar. We met there,
we had all of our first dates there. Asked her
to be my girlfriend there, so I hired it out
and she actually thought that she decided to go there
because months in advance, I'd been dropping little hints, Oh
wasn't that a great bar. Oh they've got a new menu. Oh,
(01:27):
you really liked it there, just spaced out weeks apart,
and then we were going to be down there. She says,
we should go to the Austin Bar. I said, what
a fantastic guy.
Speaker 2 (01:36):
Fantastic, so was obviously she said yes, But I always
like the reaction to it was tell us about the
reaction and were you on your own or are your
friends there now?
Speaker 4 (01:45):
So I'd had her family, all of our friends upstairs.
I had it away ready for them to come down afterwards.
Speaker 2 (01:52):
So if it was a no, it would have been
it would have come down, down, come down.
Speaker 4 (01:56):
It would have been a bad awkward But I knew
it was going to be a yes. And in terms
of the reaction, I told her to come down to
Christchurch because we're going to have a friend's party for something.
And her reaction was, oh, my gosh, why did he
do it on the same day as this friend's party
when it's all about it's all meant to be about
(02:18):
his fiance. And then I had to say, no, no, no,
we're not going to that. That was a whole ruse
just to get you down here. And then you pop
the question and it was all happy days, fantastic, I
love and look it's you know, the world is full
of enough stress and things. I just think we've you know,
even though we're here for the property, how a little
bit of love to start off the show?
Speaker 2 (02:36):
Where you go?
Speaker 4 (02:37):
Now, let's talk astrights.
Speaker 2 (02:40):
Hey, congratulations Angela. If you're listening, I suspect you might be.
But anyway, anyway, ed interest rates now there's it. You've
you've been doing a bit of writing. It's appearing on
the One Roof website as well One Roof Dot Coat
in z Ed and of course this is a one
roof radio show, so it dovetails nicely on the whole
interest rates because I imagine people refixing mortgages and stuff,
(03:02):
and I have to refix literally on Monday. They've given
me you know that finally expires, and have had all
this notice and I wanted to wait for Adrian or
to decide what we were hoping was sticking out of
a side. But I've always felt that there wasn't really
much haggling to do or go to a more mortgage broker.
But you know, you've written a piece about can you
you know whether you can actually haggle for a better
(03:24):
interest rate?
Speaker 5 (03:25):
Yeah.
Speaker 4 (03:25):
So generally you see interest rates advertised by the banks,
and it might be at the moment like six point
five nine percent for a one year rate. Generally speaking,
you can get lower than that when you go to
a bank. Now, when you actually log into your app
or you get a call from the bank, they'll typically
offer you an interest rate that's slightly lower than than
that as a bit of an incentive to keep fixing.
(03:46):
Same with you, if you go to a mortgage advisor,
they'll be able to get a slightly lower interest rate.
For example, one of the banks at the moment is
advertising I think it is, so I'm going to get
it exactly. There is one for you. One of them
is advertising six point five to five percent, but if
you go how long for a year, if you go
(04:07):
on to the ban cap or you talk to your
mortgage advisor, they should be able to get your six
point three to five percent. So that zero point two
percent off the advertised interest rate. Why, well, that's just
what banks do. They will advertiser rate, but then there
will be a negotiated or a discounted rate in the background.
The big issue most of the time is that you
can't see what those are. So if you go onto
any Facebook group about personal finance or saving money, often
(04:32):
people will be posting the interest rates that they are
getting offered via the banks, because typically it is slightly
lower than the advertised rate. Now it does depend on
different rates, so more recently the two year rates they
fell quite a lot earlier in the year and so
there hasn't been as much discounting on those. There was
a lot of discounting on the one year rate earlier
(04:55):
this year. So for example, at one point most of
the banks were advertising seven point one percent, but they
were discounting down to six point eight five percent. So
it's quite difficult because those discounts are often hidden. That's
one reason why we started just publishing them and releasing
them on our website at open as Partner stock coded
and said just so that people know, oh, yes, sweet,
(05:17):
this is what a good interest rate looks like when
I'm actually offered it by the bank.
Speaker 2 (05:21):
Because obviously, if you are someone who's just bought a
house and you've got let's just go with a half
a million dollar mortgage. And I don't mean that casually
because it's a bloody lot of message. It's not funny.
You know, you look back in the years and pick
people on what sums that roll off the tongues of people,
So like, oh, I got it for one point one
(05:42):
there would have been twenty years ago people are going
one point one? What million? But anyway, half a million
dollar mortgage. If you're a new new mortgage mortgage mortgage jaw,
morg mortgage jaw, you're jaw. That's right. You have a
bit of you've got a bit of play, you've got
some something. You're looking for a mortgage. You can go
around the banks, and that's an obvious place where either
(06:05):
through a broker or your own efforts, you can haggle.
But what about the people, So, for instance, here's my one.
It says your mortgage is up under my app with
the bank come with it's ANZ. It's no trade secret.
I just National Bank when I was a student, bought
by an Z. That's how it goes. So obviously I've
never changed banks, but I did shop around when we
first got a mortgage. But now it comes up, you
(06:26):
need to refix your mortgage. What do you want? You know,
here's what we're offering you. I I must say it.
It doesn't feel like there's a lot of room for
haggling because of technology. It's like bingo, here's your offer,
Click on this, what do you want? Tick this box? Done. Yeah.
Speaker 4 (06:41):
Back in the day, there was a lot more ability
to negotiate because you might be talking to your local
bank manager. A lot of the time it's pretty set.
So some banks actually have rate cards in the background,
so they might advertise a specific rate, but then they
will send out discounted rates to mortgage advisors, which are
often available to people you know through their apps anyway,
(07:03):
that are slightly discounted. I suppose that just makes you
feel a little bit good when you go to locking
your mortgage. Oh, it's zero point two percent lower than
what they're advertising. Sweet, there's a bit of an incentive
to go ahead with them.
Speaker 2 (07:14):
Yeah, So I mean for me, is there any is
there any other way as opposed to just clicking yes?
Or should I say I want to speak to someone
and saying because what I'm thinking, And I'm making this
up completely as I'm going along, and if my wife's listening,
she'll be like, what do you mean how mortgage is
up for renew But part of me sort of thinks,
so I might just wait till Monday rolls around and
(07:34):
then say, well, you know, I'm looking at going to
another bank. What are you going to do? But I
don't know. If I be honest, I'm probably just going
to click the six months and wait for the interest
rates to keep dropping.
Speaker 4 (07:44):
To be honest him, if I was a banker, i'd
be calling your bluff there, because in order to refinance
to another bank, it's actually a bit of a process.
You know, you're going to have to go and put
it in a mortgage application for another bank. There are
actually costs to refinance. It usually costs about one thousand
dollars to move banks anyway, because then you've got to
go to your lawyer. The lawyer has to discharge the
mortgage being registered again the title, then they've got to
(08:06):
register a new one. So it's usually cost you about
one thousand bucks to switch anyway. Generally speaking, I would
not be You know, it's very difficult to shop around
interest rates anyway, because when you're a first home buyer,
banks don't like it when you go and apply to
five different banks to try and get the best interest
rate anyway.
Speaker 2 (08:23):
So the answer is you can't really haggle. Just it's
very difficult click the button. I mean actually saying can
you do a bit? Is it actually worth trying to
get a bank representative on the line and saying, look,
I do have to fix this. But you know, you
can bluff and say I'm looking at paying it off
because of some money that's coming, or I'll keep it
going or whatever. But is it worth just saying, hey,
is this the best you can do?
Speaker 4 (08:43):
Does it work in some rare instances I have heard
at work sometimes though, a lot of bankers have to
stick to script. So for example, I had Westpac call
me up the other day. They offered me a rate.
I said, I know for a fact that is quite
a bit higher. I think it was about er point
one higher than some of the other banks, and the
(09:03):
very nice gentleman said, well, that's the we're offering you.
Speaker 2 (09:07):
So that's like that. You know what, maybe they should
have in their script listen like it or lump it
buddy if they said that something. Respect Thank you for
your honesty. So what advice do you have for people
when it comes to shopping around? Is it better to
I mean, what's the role of Most of the people
(09:27):
who come on our show would say a lot of
the time, and the received wisdom is get a mortgage broker.
Just get someone else to sort it for you.
Speaker 4 (09:33):
Yeah, the truth of the matter, and I agree with that.
But the truth of the matter is generally mortgage advisors
aren't going to be able to get a substantially lower
interest rate than you could get yourself. So generally you
don't go to a mortgage advisor because they're going to
be able to get you a lower interest rate, but
that they're going to be able to help you get
your mortgage approved anyway.
Speaker 2 (09:50):
Right.
Speaker 4 (09:51):
What people don't realize is that when you put in
your mortgage application to the bank, there are a lot
of moving parts that you can pull in order to
get your mortgage a higher likelihood that it's going to
go ahead and get approved. I'll just give you one example.
So let's say that I have my own home, I've
got a mortgage on it, and I'm paying it off
(10:12):
over ten years. I decide to go and buy an
investment property. The bank says, no, you can't afford it
yet in comes too low. Well, one thing a mortgage
advisor might say is, well, that's because you're paying your
mortgage off over ten years. For instance, if we extend
that term out to thirty years, then your minimum repayments
to the bank will look quite a bit lower, and
(10:32):
therefore they might then approve that mortgage investment property. Now,
you can still pay off your mortgage over ten years,
but if you document it or structure it such that
it's over thirty years, even if you pay it off faster,
you might get that investment property.
Speaker 2 (10:46):
It's proved. With most mortgages. You can pay every I
think when you have refixing rates, or you can pay
off a chunk every year, or something can't you isn't
there some ex bank could be different. My understanding was
you could pay five percent off the lump every time
you re refix.
Speaker 4 (11:01):
Generally, it's generally it's five percent even if you are fixed,
and they won't charge your penalty your when your interest
rate comes up for a newle as yours will you're
going to move on to a floating rate. You could
pay it all off then without penalty at that at
that point because it's floating.
Speaker 2 (11:17):
Okay, right, So what would your advice be? Not specific advice,
and I'm not going to quote you, but I have.
Speaker 4 (11:21):
To well for you. Well, that leads to a really
good question about which interest rate do you choose? And
there's actually a bit of math involved and I've just
run the numbers, right, So one thing you'll probably think,
he is, should I go for the six month rate
or for the one month for the twelve month rate
the one year rate? And what I've calculated is based
(11:42):
on the you know, it's kind of six point four
to five percent for the one yet it's about six
point eight five percent for the six month. The rates
on your app which I see that you're you're tapping
away on your phone, they're probably slightly lower because they'll
be giving you negotiated rates also.
Speaker 2 (11:57):
Equity as well. Yeah, and there's two different rates. If
you've got eighty percent, you know you own more than
twenty percent of your equity, then you get a better.
Speaker 4 (12:05):
The truth of the matter is right now for the
six month which is slightly higher. For that to make
sense in six months time, the interest rate you could
get that you get has to be six percent or
lower for it to make sense to choose the higher
rate right now, which is six months. And so the
question that you've got to then ask yourself is do
I think in six months time that I'll be able
(12:28):
to get an interest rate lower than six percent? And
based on ain Z's current forecast, they reckon that the
one year rate is going to be about five point
six percent in six months time at around that February March.
Over the next twelve months, if that was correct, it
might save you about twenty five dollars a week.
Speaker 2 (12:46):
Well, here's the tricky one with what A and Z
are doing. And if you're listening, actually, by the way,
want your calls. How do you approach refixing your mortgage rate?
And do you try to shop around? Do you try
and call up a bank manager and say, listen, can
you save me point one of a percent here on
my mortgage is five hundred thousand. It's got to be
worth it to you, guys, please can you help me?
What can you do? I don't know if that I
would assume that that approach is worth trying. But here's
(13:08):
the interesting thing on the choice that I might have
right now six point eight five percent for six months. Right.
Speaker 4 (13:13):
Oh, so they're only offering you what the advertised rate is.
That's interesting.
Speaker 2 (13:17):
Yeah, it says standard rate seven point four to nine.
But oh, okay, is this something I need to know
from you anyway? I'm going to talk about that within
the break. But here we go eighteen months five point
nine to nine, and you would think over eighteen months
if to me, that's almost if you're happy just to
tack onto an eighteen month contract, that's an interesting equation
because you've got a bank on that six point eighty
(13:39):
five dropping down to a bit less than five point
nine nine for it to be worth worthwhile or not,
wouldn't it.
Speaker 4 (13:45):
Yeah, it's interesting. There are other banks offering an eighteen
month as well as five point nine percent. It's not
currently being advertised, but behind the scenes we have a
little chatter in the break about a month anyway.
Speaker 2 (13:59):
How do you go about refixing your mortgage, and do
you try haggling or do you feel in this age
of technology, everything's presented to you on this plate on
the app and it's all sort of locked and loaded,
and I guess I just have to click this button.
Is that the approach you take? What do you call
your mortgage broker and say what can you do? Because,
as we say, if you need to refinance, you've got
to go to the lawyers, you've got to get new
(14:20):
documents drawn up and all that, and it's not that straightforward.
So maybe that's what the banks know. When you mortgage
is getting down, maybe it's not worth it. Give us
a call one hundred eight ten and eighty want to
know your tactics text nine two nine two. My guest
is Ed McKnight from O Pears Partners. That's opes is
how they spell it as opposed to ops ops. What
does it sound like an old cartoon character from the fifties,
(14:41):
isn't it? I'm thinking of op or something like that. Anyway,
that's completely irrelevant, opeas Partners, twenty one and a half
past four News Talks, EDB and welcome to back to
news Talks, heb. This is the one roof radio show
on the weekend collecting. My guest is Ed McKnight from
opeas partner's talking about how do we negotiate or can
you negotiate your interests?
Speaker 3 (15:00):
Right?
Speaker 2 (15:00):
Once you're howked in there? You know you're hooked in
with that bank and it's like they've got you and
just click into the app. Can you do you have
any other power? Or how do you shop around for
your interest rates? We've got lots of other things weren't
talking about when it comes to that sort of thing
and the incentives that banks off of you and whether
the cash back incentives are worth you know, worth going
with the bank for that reason. My guess is even
night as I saying we're going to dig into that.
(15:21):
But first Eric, Hello.
Speaker 3 (15:23):
YEAHI guys. You know, I'm just talking to you guys
from a perspective that I've paid off my mortgage.
Speaker 2 (15:29):
You have good Yeah, Eric.
Speaker 3 (15:32):
On my forties, I paid it off. But you know
I only started in my thirties. But I used the
system that a lot of people aren't talking about these days.
And I'm just lexit guy who never got at school,
c who was classed as thick as pig shirt.
Speaker 2 (15:48):
But yeah, we might try and just soften our language.
Given it four thirty in the afternoon and there are
people driving around with the kids in the car.
Speaker 3 (15:55):
Yeah thanks, Eric, Yeah right, but yeah, you know what
I'm saying is you don't have to be an entrepreneur,
you know, with a degree to to figure it out.
It's pretty straightforward stuff. They're definitely and talk to your banks,
your bank and see if you get a cheap interest rate.
I did that every single time I refixed my mortgage.
Every single time, I'd say, look, can you do a
(16:16):
bit of better job and a better price than that?
And that they'd usually done, knock a little bit off.
So that was one thing. The other thing was your
mate there, I don't.
Speaker 2 (16:26):
Know his here night.
Speaker 5 (16:31):
Yeah.
Speaker 3 (16:31):
The Flexi loans, the Flexi loan system, Yeah you did that.
Speaker 4 (16:35):
Yeah, you're dead right, Eric. So what you're talking about
there is either offset facilities or revolving credits is the
other thing that people do. And Eric, just tell us,
how are you using the flexi system in order to
pay off your mortgage faster?
Speaker 3 (16:48):
Okay, So I didn't use the revolve and credit credit
system because I didn't like I didn't like credit cards
for starters. So but I know how that works. You
basically put all your month, you live off your credit
card for a month. It's a separate It's just like
a flexi loan. Is you've got your whole line. Let's
say your loan as five hundred thousand, right, so you
put your whole entire loan over the longest longest time
(17:11):
possible that make it affordable for yourself. But take a
portion of that loan, like twenty grand, and stick that
on what they call the flexi loan.
Speaker 2 (17:19):
Yeah, it's like a draw down facility type of things.
Speaker 3 (17:21):
Basic distant overdraft, but you can draw it back and
put the money back. You know, you can draw the
money back if you need it. So what I did
is I had a separate account. They had an overdraft
of twenty grand, and I poured any savings I had.
I didn't have it as savings in the bank, because
savings in the bank to me was stupid because you're
only getting two percent off your money. So I took
(17:42):
all my spare money and I stuck everything on that
flexi loan because I knew I could get it back.
But I'm technically now getting five percent because I'm not
borrowing that money every month off the bank. If I
put two thousand dollars in there, that's two thousand dollars
I'm loaning to myself, which means I don't have to
pay five percent on it now. Over the period of
your mortgage. That adds up to a lot of money,
(18:03):
because the banks calculate your entire mortgage for thirty years,
and they calculate all the interest on it, and they
calculate how much interest you'll pay if you can knock
that down. So every time the loan came around, what
I do is I would have got that mortgage down
to say that flexi loan may be down to say
down ten grand or whatever. In two years or whatever,
(18:23):
it may be twenty grand, and I take that money
that I've got it down, and I take that overdraft
back up again and dump all that money back onto
the main mortgage.
Speaker 4 (18:34):
Yeah, and Eric, this is such a great strategy, and
my book Wealth Plan, we call it the mortgage buster strategy.
Speaker 3 (18:39):
Which is a little right.
Speaker 4 (18:41):
Yeah, Well, certainly do your situation. But what we're really
talking about is if you move some of your mortgage
across to a revolving credit or a flexi facility, and
then if you've got money saved for a holiday or
invested somewhere else, you might pot it into that facility.
You've still got access to the money for your car
appairs or for your holiday, but in the meantime, it's
saving your money.
Speaker 5 (19:01):
Now.
Speaker 4 (19:01):
One thing that I do want to talk about it.
I'm not sure if you've seen these Facebook AD's either, Eric,
there are a number of mortgage advisors out there saying
at the moment, you can pay off your home loan
and five to seven years, no extra repayments needed. That is,
and I won't use one of the words er accused,
but that is incorrect. That's not true. You can't pay
off your mortgage without making additional repayments. But you can
(19:24):
do some of the stuff that Eric's talking about here,
which can save a lot of interest.
Speaker 3 (19:28):
I was taking all like what I was doing right,
I was saying, Okay, I'll live off what I can.
So I've been a cheapy just living.
Speaker 2 (19:35):
Can I ask you just quickly how long ago was this?
Speaker 5 (19:38):
Oh?
Speaker 3 (19:38):
Okay, it's probably ten years ago now. But the fact
of the principal is still the same, Mate, and the
system is still there. But a lot of people don't
understand it. We need to go to the bank. The bank,
the teller isn't that and the managers to say, you're
one of the very few people that have actually used
the system to your advantage and literally cut on mortgage
in half.
Speaker 2 (19:58):
Yeah, well done, Eric, I mean the whole revolving credit thing,
the flexi loan, whatever they want to brand it, which
tells them it is probably what the ANZ actually because
it sounds like a familiar expression. It's basically, if you've
got extra cash that you're playing with for your life,
if you are lucky enough that you are, you have
a lifestyle where you build up resources and you you
better to stick that into a flexi loan because at
(20:19):
least you're getting the benefit of not having that off
your mortgage.
Speaker 4 (20:22):
Yeah, and if you compare putting money into your mortgage
versus a term deposit. Remember, if you put ten thousand
dollars into a term deposit, you might get six percent.
Then you've got to pay tax off that, so your
returns really four percent. If you stick it against your mortgage,
you're actually getting that, you know, six or seven percent
savings on there. The key thing is to do what
I think Eric was talking about, which is when you
have that flexi facility and you're putting money in there,
(20:45):
make sure you don't spend it. One of the things
some people do as they start putting their money into
their revolving credit or their flexi facility, then they feel
rich because they've got that money available there, and then
they go and spend it and they don't actually pay
off their mortgage faster. That's one of the classic fish
hooks that we see.
Speaker 2 (21:01):
I'm always amazed at how many This is slightly off topic,
but when interest rates get down and people go and
borrow a truckload more because to buy that car they've
always wanted, It's like you just, I don't know that.
The willingness of people to get into debt when it's
maybe not that necessary sort of always surprises me.
Speaker 1 (21:19):
Yeah.
Speaker 4 (21:19):
One classic way that kiwis funds their lifestyles, whether to
buy a boat or a new car, or a bike
or a jets key, whatever it happens to be, as
the old home loan top up, just go and borrow
a little bit more money against the house in order
to be able to pay for that. Not always the
best financial decision.
Speaker 2 (21:35):
No, Hey, what about now? Cash back offers. So you're
looking to either refinance or you're going to get your
first mortgage, and obviously banks have a lot of incentives.
I think I've even seen things where you can get
a holiday or something if you holiday to the Gold
Coast or something if you sign up with us, which
to me, I always think suspiciously, somehow I'm paying for that,
(21:58):
even though it feels like it's something they given me.
But anyway, cash backs are they ever worth while using?
Because well, hell it's a bit of extra cash in
your pocket and you've done the business.
Speaker 4 (22:10):
Yeah, I think cash banks are definitely worth it from
the banks, and just for anybody who maybe hasn't got
a mortgage recently doesn't know what those are. Let's say
you take out a half a million dollar mortgage, and yes,
it does roll off the tongue easily, doesn't it. Till
so you take out your half a million dollar mortgage.
Generally speaking, at the moment, banks are offering between zero
point eight percent and up to one percent as a
cash back. So that means you take out that half
(22:32):
a million dollar mortgage and when you draw it down,
they will put four to five thousand dollars into your
bank account. You can spend that on anything. Generally that
it pitchres a way to help cover your legal fees,
because when you are a first home buyer and you
take out a mortgage, there's a lot of costs with that.
If you refinance, like you switch banks, as I said before,
(22:54):
could cost you about one thousand dollars. So it's a
way to help cover some of those fees. But if
it only costs you call it one thousand dollars to
move banks, and they're giving you four thousand dollar, then hey,
it's a little bit of three grand profit there.
Speaker 2 (23:08):
Okay. But see I just sort of think, oh, well,
if you're going to take that cash, you should really
just stick it off against your mortgagehouldn't you.
Speaker 4 (23:16):
Well I think many people possibly do that, and I
think that's probably a very good decision. I'm sure some
people are out there bettering on whatever they want to.
Of course, there are a couple of fish hooks with
cash backs that we need to be aware of. Generally,
banks will make you stick with them for two to
four years if you are going to get a cash back,
and let's say they say, right, Tim, we're going to
(23:37):
give you a cash back, but you've got to stick
with us for three years. If you try and leave
them one or two years early, they'll make you pay
some of that back. Same as if you know, let's
say you take out a big mortgage, they give you
a cash back, then you decide to pay it all
off because you've got an inheritance, you might have to
pay some of that.
Speaker 2 (23:53):
Actually, that is, if they're giving you one percent or
something that's close to whate that's a lot of money
when you consider the interest rates.
Speaker 4 (23:59):
I think it's a lot of money. And one interesting
thing that I'll tell you about that we've recently seen,
because we've got a team of mortgage advisors at Open's Partners,
we've seen retention cash. This is something that's a little
bit new. So you've said that you've been with A
and Z for a long long time, and A and
Z knows that if you decide to walk across the
(24:19):
road to ASB or Kiwibank or something like that, they're
probably going to give you a cash back. Now, some
banks are offering retention cash, which is if you decide
that you're going to refinance to somewhere else to get
that cash back, why don't we just give you a
little bit of cash instead and you stay. Now, retention
cash is generally not as generous as a cash back.
(24:41):
It might be somewhere between zero point five to zero
point six percent. But the benefit then is you don't
have to pay the one grand to the lawyers, So
it works out to be slightly less, but there's less
faff to go through. But that's one other thing to
talk to your mortgage advisor about. Just before you jump
in Tim and say, well, where's my retention cash offer
from a sid?
Speaker 2 (25:00):
Really my expression there, I don't think I'm getting a
retention for my mortgage.
Speaker 4 (25:04):
No, But that's because you did tell me that your
mortgage is quite small. Generally these only cacking for loans
about two hundred k or more.
Speaker 2 (25:10):
Yeah, just that rolls off the tongue, doesn't it. Yeah,
half a million, two hundred thousand, isn't it?
Speaker 6 (25:15):
Funny?
Speaker 2 (25:16):
In every other aspect of our lives, the big money,
we treat it importantly with the mortgage. My mortgage is
down to three hundred thousand. Oh lucky you. Anyway, Hey, look,
we want to take your cause on this. Do you
haggle with your bank or how do you approach refinancing,
or do you just go with the technology. It clicks
on your screen and there we go. Apart from okay,
(25:36):
here's one that says, apart from Heartland, who charged like
bulls allegedly, I guess are there other options that can
free up equity for the mortgage free, asset rich, cash
poor elderly. That's from Chrissy.
Speaker 4 (25:50):
Oh, so here we're talking about reverse mortgages and Heartland
are one of the leaders in reverse mortgages in New Zealand.
And I don't purport to be an expert, but just
to explain that for any people out there who are like, oh,
what's a reverse mortgage? So let's say that you're seventy
years old, you're struggling to just live off super You've
spent your key, we say her, and you've got this
(26:10):
mortgage free house. But you've got so you're quite rich
in asset terms, but you don't have a lot of income.
That's where Heartland and other reverse mortgage providers will say, okay,
we'll give you fifty thousand dollars and you don't have
to pay that off until you sell the house or
you eventually pass away. And then they sell the house
and you pay it back. Now, that sounds really good,
(26:32):
but there's a lot of interest in there because you're
paying quite a high interest rate.
Speaker 2 (26:36):
I think, well, it's basically taking your kids inheritance if
you've got kids, isn't.
Speaker 4 (26:40):
It sort of Yeah, but how much do you love
your kids?
Speaker 2 (26:42):
Team Well, a lot, of course. Actually it's something about that.
But of course you've got to also live, don't you.
So it's a difficult decision for a lot of people.
Speaker 4 (26:53):
Yeah, a couple of things in there, because I just
did a podcast about it on the Property Academy podcast,
and one thing that my co host Andrew was talking
about was he had a client who was thinking about
going and getting a reverse mortgage, but then their kids
were worried about their inheritance side. So what the kids
all decided to do was, why don't we all do
a mortgage top up give them money to mum and dad,
(27:16):
because they're going to be able to borrow at a
much lower interest rate than a reverse mortgage would. Because
a reverse mortgage, I'm pretty sure I don't want to
get an angry call from Heartland, but I think it's
about ten percent was the interest rate that they've been using. Yeah,
giving me a face. Yes, it's quite high.
Speaker 2 (27:33):
Yeah, that's quite up there, isn't it. I'm surprised there's
not more competition for the banks for the reverse mortgages.
Do you think we'll ever get a bit more like that?
Because when that person text about Heartland, it's almost that's
one of their things they advertise all the time, isn't it.
Speaker 4 (27:47):
It's a very specialist kind of mortgage type. So I
don't know whether there's any better deals out there than Heartland.
One thing that I will tell you, because I interviewed
them for that podcast, I was quite impressed with some
of the safeguards that they've got in place to make
sure that people don't take out too much debt.
Speaker 2 (28:03):
Now, well that's well, that's good. I guess that's probably
because of the way our laws are crafted around lending
and responsible lending too, isn't it.
Speaker 5 (28:10):
Yeah.
Speaker 4 (28:10):
I think the definitely want to be a responsible lending provider.
Speaker 2 (28:14):
Yeah, okay, here's another one. Lots of text questions. If
you got a call, you've got a question for Ed
McKnight around how you approach how you should approach We're
not going to specific financial advice, of course, but you're
looking to remortgage or finance and haggling over interest rates.
Can you do it? Give us a call? Oh, eight
hundred and eighty ten eight eight. Somebody said, what do
you think about SBS offering five point five nine percent
(28:35):
lowest rate advertise in the country and no one seems
to talk about it? Extremely competitive, writes this person, who
I don't know if they work for SPS, but it
would be a good move for them to have texted that.
Speaker 4 (28:45):
So you were saying five point five to nine oh
for the first home combo, as I've just seen on
interest stock coder in Zin. So it looks like that
for a one year, they've got the first home combo.
To be honest, I don't know much about that specific offer.
Speaker 2 (28:57):
Okay, okay, So we're not going to comment about that.
Speaker 4 (29:00):
I'll dig into it.
Speaker 2 (29:01):
I'll dig into it another time. If banks don't like
clients shopping around and apply to applying to multitudes and
banks for loans, as your guest says, and look to
punish those that do, I'm sure they look to punish
those that do, do they surely that's oh, somebody's wondering
if they look to punish those that shop around. I
don't think they do that. No, So what I'd say,
they just don't incentivize as much as well.
Speaker 4 (29:23):
It's not preferred because the trouble with applying for a
mortgage is that there's lots of people trying to do it,
and if people go and apply to every single bank,
then it slows everybody else down because you've got a
big traffic queue in terms of your mortgage applications. So
certainly what some people borrowers get frustrated about is if
you go and talk to a mortgage advisor and you say,
(29:44):
go to every single bank and try and get me
the best interest rate. A mortgage advisor will not do that,
and the reason is because the banks don't like doing
that because it slows everybody down in terms of a queue.
I'm not sure whether a bank goes ahead and punishes it,
but what I will say is that if you go
out and apply to a number of banks, that will
show up on your credit report, and then that will
(30:05):
times make banks nervous because if they're saying, well, you've
applied to four other banks, why are the other banks
saying no?
Speaker 2 (30:13):
Okay, yeah, okay, that's interesting advice there, yeah, or point
to observe yet it's twenty minutes to five news Talks.
You be back in just a moment. My guest is
ed mknight. This is the week in Collective One roof
Radio show at twenty minutes to five and welcome back.
I love a little bit of our easy into one
of our sessions at the one roof Radio show. My
(30:33):
guest is Ed McNaught on Tim Beverage and let's take
some calls talking about interest rates, taggling for you know,
your refinance with your new mortgage. Neil, Hello, Yeah, Hi
guys are good.
Speaker 5 (30:44):
Thanks so you I had quite a question with my
wife and I have done really well over the years
and actually quite enjoy playing around with our mortgage and
looking at the options available. So I've been enjoying the
conversation today. However, over the years we've always thought, hey,
we want to deal directly with the bank. However, then
you know they don't do what we want and we
(31:06):
hear these guys are getting better deals, and then you
know the advice is, hey, go to a broker, they
can get a better deal. Brokers have a backdoor that
I can't access as a regular guy. Or what's the story.
Speaker 4 (31:17):
Oh, the question such a great question because there's often
quite a few misconceptions here. So a lot of people
think that mortgage brokers can get a lower interest rate.
Generally speaking, that's not the case. Whether you go directly
to the bank or you use a mortgage advisor, the
interest rate's probably going to be the interest rate. The
real value in a mortgage advisor is setting up your
(31:38):
lending the right way. So, for instance, if you were
going to go ahead, Neil and buy an investment property,
one of the key strategies we often talk about is
split banking, which is effectively cheating on your bank using
multiple banks at once, and mortgage advisors are really good
about setting it up the right way so it is
the most tax efficient way for you to do it,
and also setting up your mortgages so that when you
(31:58):
want to go and buy your second investment property, hey,
look it's all set up so you're able to go
ahead and do it. So the best deal is probably
correct in terms of setting it up the right way,
making sure you're able to get the lending that you
are wanting, that you get your mortgage approved, But in
terms of best interest rate, I don't really think that happened.
Speaker 2 (32:17):
Although some mortgage some mortgage brokers have specific relationships with
banks who may offer them a slightly better rate. Isn't
that right?
Speaker 4 (32:24):
Well, generally we talk about the advertised rates and the
negotiated rates. Now, the negotiated rates mortgage advisors have access
to because they know, you know, what other customers or
borrowers have been able to get. But generally the bank
will be able to offer you the same rates that
a mortgage advisor would be able to get. That's the
truth of the matter.
Speaker 2 (32:45):
Actually, funny enough, I spoke to the guy who helped
us with our mortgage and gave McCall and said, look,
I'm refinancing. Should I do it through you? And he
said what rate of the bank going for? And I
told him and he said, just go with that, don't
worry about it, you know, just save me the hassle
of it, so, which was quite helpful. Actually, right, Let's
take another call Sue.
Speaker 6 (33:03):
Hello, Hello, how you doing good?
Speaker 2 (33:06):
Thanks? Where you go?
Speaker 6 (33:09):
Yeah? Cool? Hey, strategy. I don't know that you've said
it or not, but for me and we're just refinancing
at the moment. Definitely, I wouldn't look at changing banks
because of simply the legal costs, et cetera, and the drama.
But I definitely would work towards what can I afford
for the next period of time? So is it six months,
(33:30):
is it a year? Is it eighteen months? And that
would be one of the big drivers, not.
Speaker 2 (33:36):
Just what is the interest rate, so more thinking about
how can I plow off as much money as I
can and structure it that way, And that's worth you know,
worth more than haggling over an interest rate.
Speaker 6 (33:47):
Well that plus plus how how stressed am I going
to be if I if I say I'm going to
fix for six months and then the interest rates unconceivably
go up, then I'm going to be screwed. Whereas if
I fix for twelve months, then and I know that
that's my spending for the next time months, And it's
a good strategy because that way, it's a little bit
(34:09):
like having a high purchase that you not gonna have them,
but then you know the amount that you're gonna pay
every week. It's that solid.
Speaker 2 (34:19):
Yeah, that's a good point, isn't it. So the sou's
basically saying the attitude to your mortgage and paying it
off quicker, it's going to be worse than trying to
save point one percent or something, just pay it off.
Speaker 4 (34:28):
It's outrageous the amount that you can save on your
mortgage if you just pay a little bit more than
the minimum repayments. And I think that's such a good point.
Speaker 2 (34:34):
So yeah, in fact, you can go and do just
it's worth doing comparison calculations. How much more and how
much am I paying on my mortgage if I go
for the extra five years or whatever, and seeing the
massive difference, and you think how many overseas holidays is
that they can blow it on? Anyway, Hey, thanks for
coll So we'll be back in just One roof. Property
of the Week is next. It's twelve minutes to five
Newstalk sd B and welcome back to the One Roof
(35:01):
radio show. That music is completely incidental and no comment.
My guest ed McKnight from Opius Partners, and it is
that magic time of day though it's eight minutes to five. Yes,
and the one we property of the week is well,
it's a in Buller. It's a Fox River Buller five
(35:22):
seven seven O State Highway six. You can look it
up on the One Roof website. And it is a
second where I just click on the screen. Here it's
got an asking price at one point six million. It's
three bedrooms, two bathrooms, five car garage workshop. It looks
like it's set on Here's the thing fifty acres with
two separate titles that you can profit from while I'm
enjoying yourself. It says entertaining decks, a spar pool, a
(35:45):
fire pit. It looks like it's a house as well
as a sort of separate and airbnb. In fat one
of their photos, it's got a lineup of the crayfish
that they've probably caught nearby. It's so it's yeah. It
talks about an eighty one square meter garage or workshop
space surrounded by avery than The West Coast is known
and loved for crayfish, hector dolphins, two e's and gorgeous
native bush. Interestingly ed which you noticed when we were
(36:07):
chatting about it in the break. It's been listed for
a little while. It's been on the market for a
little bit, so they'd be wanting to get rid of it.
I guess.
Speaker 4 (36:13):
It was launched on December twenty twenty one, updated twelve
days ago. This is always something to look at when
you're purchasing properties because That tells you if they've updated
the listing, maybe changed the sale process, moved to maybe
an asking price where in the past it might have
been been priced by negotiation. That's a little bit of
a signal that there could be a deal to be
had because that updating the listing. They're like, oh, we're
(36:35):
having some conversations about it, and it's.
Speaker 2 (36:38):
Quite a spectacular looking property. I always get so every
week when we have it, I say, it's like taking
a mini holiday, just going to have a look at
someone else's house. But what a beautiful area.
Speaker 4 (36:46):
Stunning, isn't it one point six million dollars in Buller.
I thought you might be able to buy half the
West Coast for that, And we've just.
Speaker 2 (36:54):
Been such an Auckland's statement. We've just to sell. I
can sell my house in Auckland and I could buy
half the West Coast.
Speaker 4 (37:03):
We're going to get a lot of agri callers now.
Speaker 2 (37:06):
Actually it's a gorgeous link property though those views look
absolutely magnificent, don't they.
Speaker 4 (37:11):
And beautiful part of the country down on the West coast.
Speaker 2 (37:14):
Yeah right, Muzz says, holy something. I can't say what
he's saying, but he's moving to buller. I'm guessing Muzz
lives in Auckland and he's worked out that he can
cash up. We've got time. Maybe we've got time for one.
Actually no, here's a quick text here. Hi, Tim, can
you tell me how much commission mortgage brokers get and
how does that work out in the whole equation?
Speaker 4 (37:34):
Yeah, generally it's zero point six percent of the mortgage value.
So let's say that it's half a million dollar mortgage,
it might be a three grand commission.
Speaker 2 (37:43):
O excellent, Right, let's squeeze one another caller, Josh today.
How's that? Fellows? Good? Thanks? You got two minutes.
Speaker 3 (37:51):
Let's good.
Speaker 2 (37:51):
Hey, I'm in my love her twenties and I've got
a question for you guys. I'm probably going to be
in the housing market in like five to eight years.
Whether you think it's going to be then? Do you
think they're going to be better or worse? Or oh
what do you mean? More expensive?
Speaker 4 (38:05):
A straight?
Speaker 3 (38:05):
Oh? Five years?
Speaker 2 (38:06):
Your thoughts on the market? Big core for prediction. Because
I know nothing about property, don't listen to me. I
reckon it's going to be maybe a point lower than
it is now.
Speaker 4 (38:16):
To be honest, I wouldn't know I wouldn't even be
willing to guess five years out. I'd guess three years
out and say I'd expect them to be low. But
the issue is that the long run OCR is kind
of two and a half to two point seventy five percent.
That suggests that the one year interest rate might be
about five percent when the reserve banks neither trying to
speed up or slow down the economy. But there's going
(38:39):
to be some world event that happens in the next
five to eight years, whether it be another COVID or
something's going to happen that's going to screw with interest
rates because the economy is constantly responding. So I wouldn't
even have a guess at what it's going to pen
five to eight years. It's too far out.
Speaker 2 (38:52):
How's your saving going, Josh, how's Australia? Now, how's your
saving going?
Speaker 3 (38:58):
Not?
Speaker 2 (38:58):
How going good?
Speaker 3 (39:00):
Yeah?
Speaker 5 (39:01):
How's Australia.
Speaker 6 (39:03):
Yeah, savings are going good.
Speaker 2 (39:07):
Yeah, there are a few people are heading off to Australia,
probably because they see that as a way of saving
and maybe never return. Hey, ed, great to have you
in and see Nice to see your piece on the
One Roof, One Roof website. And yeah, and of course
you'll get your podcasts that you do daily. I think,
isn't it.
Speaker 4 (39:22):
Yeah, the property can be podcasting. Go and check out
that interest rate cut counter on the one Roof website.
It's excellent, excellent.
Speaker 2 (39:29):
Right, we will be back with the Parents Squad. We
have a brand new guest on the show, very exciting
and her name is Kim Harvey and she'll be in
the studio with me very shortly. It's four minutes to five.
Speaker 1 (39:43):
For more from the Weekend Collective, listen live to news
Talks'd be weekends from three pm, or follow the podcast
on iHeartRadio.
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