Fixed vs Floating

By Brendon Ojala

Since last writing there has only been very small movements in interest rates.

A good one year rate (for an owner occupied loan with at least 20% deposit) would be in the 4.2% range, drifting up to a good 3 year rate at 4.7%.  A discounted floating rate should be around 5.2%.

Each month we get the main banks “interest rate” comments.  For many months now the ANZ economists have been saying the “sweet spot” is still the 1-year rate.  This rate is generally the cheapest on the market.  And it also indicates they don’t see any large rises in rates in the next year, so the premium for having longer certainty is small right now.

Last week I attended a conference where economic reporter and commentator Bernard Hickey presented his observations on Interest Rates amongst other things.  His reflection is that our economy is in a long term low inflation environment, meaning a long period of low interest rates (and high asset prices)

If ANZ and Bernard are right, take the lowest rate on offer!  If that makes you nervous, “hedge your risk” by splitting your loan over different fixed periods.

As everyone's situation is unique and there certainly isn’t a “one strategy fits all” solution out there, so, as always, before doing anything, talk to your Velocity Mortgage Adviser. 

Brendon Ojala a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.

Mid-Winter Eggnog Recipe

By Stevie Waring

This recipe is the perfect excuse to invite friends over for mid-winter festivities.

When outside is wet, icy and cold, sometimes all we want is to isolate ourselves in the warmth of our houses and hibernate until spring. But I assure you, there’s one thing better than being a hermit this winter … it’s throwing a Mid-Winter Christmas Party!

Grab your favourite woolly jumper, your merriest friends and make a big batch of eggnog to celebrate winter.

Serves 8

You can forgo the rum for a non-alcoholic eggnog

Ingredients:

·         3 cups milk

·         1 cup cream

·         1 vanilla bean pod

·         1 teaspoon nutmeg

·         5 eggs separated

·         2/3 cup sugar

·         ¾ cup Rum or Bourbon

Method:

·         In a saucepan, combine all of the ingredients except eggs, sugar and alcohol. Bring to boil over medium heat, then remove from heat and allow to steep.

·         In a large bowl, combine egg yolks & sugar until pale and thick. Slowly whisk in the milk until mixture is combined and smooth. Add alcohol and stir. Refrigerate (at least) overnight or up to three days.

·         Before serving, beat the egg whites in a large bowl until soft peaks form. Fold into the eggnog gently. Serve in a classic glass and top with some nutmeg and cinnamon.

Deal of the Century: Insulate your home interest-free with ANZ

By Kylie Cassidy and Stevie Waring

With temperatures dropping, no doubt you’re noticing every little draught through the house or disappearing warmth from your heater—all culminating in ever-increasing power bills. Thankfully, there’s one bank that’s trying to help.

New Zealand is notorious for having cold, uninsulated houses, but the country is starting to understand. As of July 2019, insulation will be compulsory for all rental properties, which is incredible for the health and wellbeing of those renting properties, but it poses an expensive issue for landlords, and this is where ANZ has come to the rescue.

ANZ has pledged $100 million of interest-free home lending to help insulate homes in New Zealand. For each security (property), you may be able to borrow up to $5000 interest free over a 4-year term. This is an incredible opportunity because, not only are ANZ making near-no money off this, but it provides you, your properties or your landlord the opportunity to make Kiwi homes warmer. 

The ins and outs:

·         No application or establishment fees;

·         The loan is specifically for installing installation into the ceiling, walls and floors of your home (so you’re             not able to use this for double glazing or heat-pumps, for example);

·         The maximum term is 4 years;

·         A maximum of two interest-free loans per customer.

Only existing ANZ customers are eligible, however, if you transferred your lending and gave ANZ a mortgage over the house to be insulated, you would become eligible to apply.

As can be expected, you will need to provide ANZ with a quote from a reputable insulation installer.

Shiver no more and get in touch with us if you would like to discuss further.