It is a wonderful opportunity to once again be writing this column as sponsor of the Otago Property Investors’ Association.
NZPIF Conference
The OPIA committee did a fantastic job at the recent New Zealand Property Investors’ Federation 2018 Property Conference in Dunedin. It was a wonderful weekend and a great time was had by all, with some very inspiring speakers and food coming out of our ears! The hospitality was excellent and the awards dinner on Saturday evening was very well run. Thank you to all involved organising the event.
Our team representing Tony Mounce Mortgages & Insurance thoroughly enjoyed the experience and our involvement as principal sponsor went down well too. I very much enjoyed my speaking slot, but with hindsight I would have liked to have more time.
Big Problem
A lot of people are concerned about P&I repayments on their property portfolios as they fall off their current interest only periods. This can have massive ramifications for cash flow and it may make your loan unaffordable. Property investors need to know what is happening with the mortgage market. Banks are no longer easily rolling over interest only periods so it is prudent to review your mortgage frequently and talk to an adviser about like-for-like transfers.
The technique of like-for-like transfers, re-positioning your lending to a new provider and therefore recommencing interest only for another five years, has proved to be very popular with property investors in Christchurch, and no doubt will benefit those elsewhere in New Zealand as well. At the same time, if there is the equity due to good growth, this presents an opportunity to release security.
Rates
The swap rates in New Zealand remain very flat and annual fixed rate rollovers remain my preferred strategy for managing your mortgage effectively. 1 year fixed rates allow you to keep your eye on the ball. However, the current 3 year offer at 4.39% has merit in considering. It all comes back to the sleep test.
Break fees may not be as much of a handbrake towards the goal of saving money, due to banks only charging a penalty if interest rates reduce, which is unlikely at the moment. Hence, break fees at the moment are negligible. If interest rates do commence on an upward trajectory, the cost of getting out would also be small as banks can only charge the break fee on a reduction.
If you would like to discuss the numbers to see what options are available for you, get in touch with a member of the team at Tony Mounce Mortgages & Insurance. We would love to chat about how we can review your position and help you achieve your property investment goals. 0800 MOUNCE
If you would like to be sent a copy of Tony’s NZPIF Conference presentation, please email Samantha Ellis, Marketing & Administration Coordinator.