ANZ Wants to Warm Your Home … Interest Free


Many Kiwis live in homes that are simply too cold, damp and breezy. ANZ have heard our cries and are offering homeowners a sweet little deal to warm your wallet as well as your castle.  


In recent years, we’ve all cottoned on to the fact that damp, draughty homes are not acceptable. This has seen much discussion in the media around rentals and the need for landlords to stump up and properly insulate their tenants’ homes.


However, the question of house quality spans beyond rentals to owner-occupies as well. In 2018, ANZ pledged $100 million worth of $5000 interest-free loans for ANZ customers to insulate their homes. The great news in 2019 is that ANZ’s Healthy Home Loan scheme to improve the health of New Zealand homes continues.


Whether you have a reasonably new home, are renovating your existing home or building a new home, ANZ's aim, it seems, is to encourage you to have a healthier home. And, of course, it’s also an enticing carrot to get you to switch allegiances with your banking provider.


So, what are the three aspects of your home that are considered under this loan scheme?

  1. Dryness (ventilation, dampness)

  2. Warmth (heating, insulation)

  3. Safe & Efficient (smoke alarms, water, energy-efficiency)


What are the benefits of a Healthy Home Loan with ANZ?

  • Interest rate discounts (off standard rates)

    • Fixed rate discount of 0.70% p.a.

    • Floating rate discount of 1.00% p.a.

    • Flexi rate discount of 1.00% p.a.

  • They'll waive the account fees on your Flexi Home Loan, Freedom (everyday) Account & Personal Credit Card


To get a Healthy Home Loan with ANZ, the first step is to get your Homestar Rating of 6 or higher. There are two steps to this:

  1. Complete a HomeFit online check (

  2. A HomeFit assessor will visit your property and, if it's up to scratch, will provide you with a HomeFit Certification. The assessors visit will cost approximately $300.


If you're unsure if this package, or ANZ full stop, is the right move for you, give us a call and we can help you understand the details and size it up to make sure it will fit your needs.


No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.


Fixed vs Floating


Now is a great time to be refixing a home loan. As long as you have sufficient equity in your property it is very likely you will be fixing a home loan for a rate under four per cent.

The official cash rate has just reduced to an all-time low of 1.5%. This will mean some downward pressure on rates. However, it is likely the markets have priced some of this in already. At the time of writing, there has been no movement in terms of home loan rates, however, we wait with some anticipation.


The only upward pressure on rates seems to be the Reserve Bank consultation to increase the capital that banks are required to hold. If/when this gets agreed to, it will affect the profitability of banks and, therefore, is likely to see some upward pressure on rates. However, this seems like the only force capable of driving rates north right now.


On a related note, when an adviser from Velocity sits down and reviews a client’s home loan structure, it is very rare that there isn't some 'tweak' we can make to improve that client’s situation. Sometimes a major overhaul is required and, with interest rates this low, overhauls are common.


I hope that before your fixed rate rolls off, we will be in contact. However, our system isn't (quite) foolproof, so if we do miss you, please don't hesitate to make contact and we will chat through options over the phone or arrange a quick review meeting.


Brendon Ojala is 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.



Fixed vs Floating: New Year, New Interest Rates?

Starting off 2019, interest rates are staying low but the Reserve Bank may have a trick up its sleeve that could have a downstream influence on the great fix versus float debate. Brendon explains.


There has been some post-Christmas sharpening of home loan interest rates. 

You will see a 3.99 per cent for one-year and two-year loans currently being advertised. This normally applies for "main bank", owner-occupied clients (in other words, not for low deposits or investor-only clients).


From an economic perspective, there doesn't seem to be any upward pressure on these rates for 2019. Interestingly enough, the only pressure that may come to bear is a potential Reserve Bank/government regulation requiring banks to hold more capital.


The Reserve Bank has suggested that the percentage of "money [that] banks have in hand per amount of loans outstanding" may need to increase to better protect the banking system from any economic shocks (known as capital adequacy ratios). If this is implemented, it will effectively increase banks’ running costs. Unless the shareholders are willing to take lower returns (??!!), then the customer will pay—at banks, this means increases in interest rates.


So, should you fix or float?


Securing an interest rate under four per cent isn't bad!


Up until now, most of our clients have been fixing for one year because that was the lowest rate and because the expectation was rates would stay low for another year, giving time to re-fix in a year for a still low rate. 


The only spanner in the works to this approach is the possibility of the above regulatory change, which still remains to be seen. The potential for changes introduces some uncertainty to the mix and some of our clients may choose to minimise that risk by fixing for two years, at what is now a great two-year rate.


Be aware that all clients won't get that exact rate, as it is case-by-case, bank-by-bank. If you have good equity, you should be getting close. Note also that everyone is different, so how long you fix your loan for may be different than the next person.


Also note that it is often wise to keep some flexibility. Channelling any cash surplus to your home loan in a smart way can surprise many with the difference it can make.


We can work that all out for you.


Brendon Ojala is 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.

Should I Refinance my Home Loan?

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By Kylie Cassidy and Brendon Ojala


With the banks competing for new customers and offering cash incentives, the temptation to switch banks can be rife. Brendon and Kylie ask if the switch is really worth it.


The first thing to note if you’re considering refinancing is that you should consider much more than just interest rates. The actual costs can vary depending on whether you have existing loans that are still fixed. There are also the non-monetary factors like finding a bank that better suits your needs or has a superior service level. These are all things to consider.


Turning to your mortgage broker for advice should be your first step as they can help you work out the pros and cons, in the meantime, here are four factors to get you thinking:


1. Does the bank suit my needs?


Consider the bank’s products and whether they will suit your current needs. Do you want to be able to make lump sum payments without penalty? Do you want a large revolving credit account? Or perhaps an offset product where you can use the funds across savings accounts to offset the interest on your mortgage?


2. Don’t get hung up on lower interest rates


Lower interest rates aren’t the be-all-and-end all, and often some smart budgeting coupled with the right mortgage structure can give you more than then a 0.2 per cent decrease in interest rates. We will of course, work hard to get a competitive rate from the bank, but it’s in this finer detail where your mortgage broker can add real value.


3. Making the switch can be messy


If you’re offered a cash incentive to move banks, chances are you’ll need to move your banking across to them. This means changing your APs, direct debits, salary and so on. Some banks do offer a “switching service” to make the process easier, but you may need to keep your existing account open with some cash in it, to cover any repayments or direct debits you may have forgotten about.


4. Costs of switching


Below are some costs to consider:


·         Potential break costs at your current bank (anywhere from zero to tens of thousands!)

·         Lawyers fees (approx. $1000-$1500)

·         Cash contribution claw backs (if your current bank offered you a cash contribution, if you move banks within a certain time frame—between two and four years—they reserve the right to ask for this cash back.

·         Discharge fees ($100-$150)


The new bank may offer you some cash to offset the above costs, however, it’s important to consider all of the above. The “best bank” offering the lowest rates changes all the time, so it’s important to consider your needs long term. 

Name *


Kylie Cassidy and Brendon Ojala are Registered Financial Advisers 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.

From Facebook to your Mortgage: What happens when you die?

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You’ve possibly already thought about some of the more obvious things like your house, your car and your family. But what about your bank accounts? Or even your Facebook profile? Wrapping up your whole life is not a simple task as Alex explains.



What happens to my mortgage and bank accounts when I die?


When you pass away the bank requires you (as the other party of the contract) to pay back lending in full before any property or money is distributed to beneficiaries.


All bank accounts and overdrafts are immediately stopped. Payments to the bank for interest and fees will still continue from the same account to avoid defaults. Then your estate needs to service the loans in the interim from those accounts. When you co-owned the property, the ownership can be transferred solely to the surviving owner.


Business accounts are a bit more tricky and these will freeze instantly as the owner of them is no longer there. If there is a partnership they will be frozen well as the partnership ended upon the passing of the other partner.


It is very wise to update your lawyer 


What about my Facebook account?


When you die, nothing automatically changes to your Facebook – but as soon as Facebook knows that you are no longer with us (and boy, do they know) there are a few options that you can choose:


1. Leave it as it is

You can, of course, leave the account as it is. This is not recommended as it means your data is guaranteed to be 100% secure.


2. Memorialise your account

Your loved ones can ask for your Facebook account to be memorialised by completing a memorialisation request and providing a scanned copy of the death certificate. Once the account is memorialised, no content can be altered or removed and the account is effectively locked down to eliminate any chance of being hacked. Only legacy contacts (your ‘digital executors’ can post on your behalf (for example, to give friends and family details of a memorial service). Friends and family can still post on your timeline to share memories.


3. Delete all data

Facebook only allows immediate family members to request all your data be deleted. They process this as a special request, and it requires scanned documentation as proof of your death. You can download all your Facebook data at any time if you wish to keep back ups.


Of course, that’s not even the half of it!


Come and have a chat to us or make an appointment with your lawyer to talk about it more. We’ll help you take charge by working out what might be the best option for you – and getting it down in writing.


Alex Barendregt is 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

What's up with the banks?


It’s 2018 and change is afoot in the banking world. But, don’t worry, we can also expect much more of the same, says Graham.

Firstly, all banks are now lending at 65 per cent on second-hand investment property. This increase came about on 1 February and certainly helps if you are wanting to build a portfolio. Second, it’s good to note that all banks are also lending up to 85 per cent on new build investment properties. Remember, a second-hand property (by the reserve bank rules) is any property that has had a code of compliance for six months or more.

Apartments .... We have one bank in New Zealand who won't lend at all on off-the-plan apartments and another who will go to 85 per cent. Please notice I didn't say who ... ring us and find out.

Another point of interest in the banking landscape is that, in 2018, we will see a continued exit of banks from giving advice in the investment and insurance space. There is big pressure building in Australia for banks to act in the best interest of their clients which is difficult to do when you only have your own products to wedge clients into. This pressure will continue to flow through to the New Zealand subsidiaries. This will have implications for KiwiSaver as well (for example, ANZ, strangely as New Zealand’s biggest bank, is also our biggest manager of KiwiSaver funds).

This news on investment and insurance advice is good news for Velocity and all other independent financial advisers. Our place with multiple product suppliers is what will continue to be demanded and expected, not just by the market, but also the regulators.


Graham Goodisson


Graham Goodisson is 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.

We just bought our first home.. phew!!


Alex has had an exciting summer, not only due to the amazing weather but also the fact that he and his partner have bought their first home. He shares his tips.


After gruelling budgeting—ditching brunches and lunches—requesting every favour in the favour-asking-repertoire book and numerous chats with Brendon, my friendly Velocity Mortgage Broker, about “how to get the deal across the line”, finally, our brunch-deprived weekends were spent at open homes, fighting with hordes of other potentially buyers.


In the end, we fought off the hordes and secured out little slice of paradise and are proud Wellington homeowners. The road was not easy and let me share a few tips that helped us out a lot.


Budget, budget, budget


Dreams are great and everyone has them, but only some people achieve them. The difference between people who achieve dreams and people that don’t is often very simple: one just dreams away while the other makes a plan.


The vast majority of people have to save up for a deposit—unfortunately, these do not just magically appear in our bank accounts. The only way to get there, fast, is to have a goal[1], make a plan and set the budget to achieve it.


Making a budget is the real deal; it gives you something to work with, work towards and gives you a sense of achievement. There are many great tools to help you budget. Find a way that works for you. At Velocity we have a useful get-rid-of-your-mortgage budget calculator.


Get professionals involved … early!


I can’t stress enough how important it is having professionals involved. Unless you are one or have extensive practical experience, prioritise seeking out assistance. Here are some examples of useful pros:


-       Ask the real estate agent for all information about property, neighbourhood, disclosures, etc.;

-       Get your lawyer to check the LIM and other documents;

-       Get a buyer’s building inspector in;

-       Contact your mortgage broker (that’s us) early to sort finance for that specific house;

-       Drop a line to your insurance broker to get an insurance certificate for the specific property;

-       Do extra checks—parking, public transport, cost of renovations etc.


All these professionals do these things on a daily basis and, when compared to taking a DIY approach, can save you vast amounts of money, time and stress.


After living in our new place for two months while the first round of renovations are taking place, I can testify to the need to avoid DIY-ing it whenever possible.


Next time: Budget and goal-setting tools and tips


Alex Barendregt is 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.





[1] A good goals setting tool is the SMART technique – which encompasses all areas of setting and achieving a goal by making it – Specific, Measurable, Achievable Relevant/Realistic and Time bound.


How to upsize your family home


We all know about the struggles of first-home buyers in today’s property market, however, there is a new group in an equally precarious position: those with “honey, I grew the kids and shrunk the house” syndrome. Lance explores how this group can upsize their home.


Here’s one of the main issues facing the upsizing family: Current housing market has meant that buyers with the least (read: zero) conditions win in the offer process. So, then, how do you purchase your next home without the fear of not only you becoming homeless, but also displacing your family? This hurdle facing the upsizing family stems the flow of smaller homes ideally suited to the many despairing first-home buyers.


So I propose three potential solutions for the too-small-home owner:


1.  Put in an offer conditional to sale of your existing property

In the Wellington property market of early 2018, there seems to be an ever so slight sway back towards favouring the purchaser. This is giving buyers more space to negotiate terms, particularly if the property has quirks. This being said, an offer subject to the sale of your property is not the most attractive term. It could take weeks to sell your smaller home, and there is no guarantee for the vendors that this will ever take place.


2.  Sell your home first

Sell your home, move to a rental (note, there are no rentals) with your family and hope to get back into a larger property. Now, I have a five-year-old daughter, and a two-year-old son, and as a parent the risk involved in such a move can just be paralyzing. What if we price ourselves out of the market? What if we can’t rent near their school/day care/work?

One of the benefits, of course, is that you are ready to offer (if you are not under a fixed rent agreement)—you have your cash in your hand and are ready to pounce!


3.    Bridging finance 

There are a couple of types of bridging: Open and Closed.


Closed bridging is when you have a sale date already confirmed for your current property and you wish to settle on a new property sooner than your current property is sold.


Open bridging is when you wish to cement an unconditional offer of purchase before you have a confirmed sale date on your current property.


Although both can be difficult to obtain, the questions the banks need answering over the bridging phase are as follows:

·      What is the equity position (the difference between your loan and the value of the property/s)? (the more equity the better)

·      Do you have access to cash for covering payments on both loans for an extended period of time?

·      You’ll often also need to provide valuations on both properties to confirm the likely sale price and demonstrate job security and income.

As always there are multiple considerations both in your personal situation and in partnering you with the right bank. Currently we know a couple of banks who have a greater appetite for bridging finance than others. If you would like to discuss the possibilities of bridging finance be sure to contact us at Velocity Financial and confirm whether this is an option for you.


Lance Shearman is 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

Fixed vs Floating


There is some upward movement in interest rates overseas, but not much happening here … yet. So, is now a good time to fix or to float? Brendon investigates.


In mid February 2018, there is in fact a little downward movement in short term fixed interest rates.  Here is what I think are “good interest rates” (for an “average-sized” home loan on your own home with 20 per cent deposit):


·      Floating rate: 5.3%

·      1-year fixed: 4.3%

·      2-year fixed: 4.5%

·      3-year fixed: under 5.0%


As I see it, there are a couple of significant forces at play on our home loan interest rates.  Firstly, the international interest rates seem to be rising (which many pick as the main reason for the US share market hiccup on Monday 5 February—rising interest rates mean the value of shares/companies tend to drop). In principle, this is likely to increase our longer term (3- to 5-year fixed) home loan rates.


Secondly, news continues to filter out confirming that inflation in New Zealand seems to be staying low. This would lead one to believe any increases in the OCR are still some time away. In principle, this is likely to keep our floating and short term (1- and 2-year) fixed home loan rates low for a while yet. Right now there is some price competition between banks that have seen small decreases in fixed 1-2 year rates in the last fortnight.


So … should I fix or float?


A good question! It is perhaps better to have a one-on-one conversation about that for your specific situation. However, here are some questions I ask all my clients before we decide on a mortgage structure strategy.

1)    If rates increased by 1 per cent (or 2 or 3) what impact would that have on your ability to repay your home loan?

2)    After paying all your costs, how much surplus do you have at the end of the week (or fortnight/month, if that is how you budget)?

3)    If you have a goal, are you good at saving towards that or would you still spend any money you have in your bank account?


Once we have the answer to those questions, we can start to get a really good home loan structure in place for you.


I can’t tell you what interest rates are going to do. I can pass on what many people wiser (?) than me think, but we can have a good guess and, if we get the structure set up according to the above three questions, you will be well on the way to having the best home loan structure set up for your situation.


Brendon Ojala is 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.

Reserve Bank to ease LVR restrictions


You may well have heard that the Reserve Bank announced some changes to their LVR (Loan-to-Value Ratio). 

They have announced that as of the 1st January, the amount of funds banks can lend with less than 20% deposit is increasing from 10% to 15%. Banks are also able to lend to investors with a 35% deposit compared to the current 40%. 
So what does this mean? 
If you are a first home buyer, it's going to be slightly easier for you to purchase if you haven't got a 20% deposit. (Note, however that the banks will still decide how generous to be with these applications). 

For investors, we predict that the banks will loosen up their policies in line with the reserve banks rules of needing a 35% deposit compared to 40%. This will make some difference particularly to new investors. We don't think these changes are going to be dramatic, but it will have a small effect. 

If you think this will impact you, free to get in touch with your friendly Velocity Financial broker. We are always happy to help.

Until next time.. 

The team at Velocity Financial



Brendon Ojala is 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.


Kylie’s 5 Summer Reno Tips


Whether the goal is to sell or to dwell, Kylie shares her five top tips for making renovations work for you and for your financial and lifestyle goals.


1. Budget

Are you planning on living in your property long term? Before setting a budget, think about your plans. Adding a swimming pool to the family home might not get the return you’re after when it comes time to sell, however, if you’re around for another 20 years it’s can be an investment your family will have time to enjoy.

Consider the re-sale value of your property and your target market if you were to re-sell. Look at what other properties in your neighbourhood are selling for and consider what you paid for yours.

It may be tempting to put an expensive $30,000 designer kitchen in, but not everyone can appreciate the difference between a $15,000 flat-pack kitchen and a designer one. However, doing things on the cheap can be counter-productive, too.


2. Keep it simple

Most buyers will be interested in putting their own stamp on the property. So, choose your colours and patterns carefully. Opting for neutral colours and styles is always the safe option.  


3. Make a priority list

If you’re not sure where to start, concentrate on things that will improve the comfort of your home, such as insulation and heating.


4. Consider your target market

If you are thinking about removing a bedroom to create more space in your dining room, it pays to think about who your target will be if you sell. Will your home be suited to a young family or a retired couple? The ideal number of rooms and the ideal size of the dining room will vary for different buyers.


5. DIY or professional?

It may be tempting to take a DIY approach to renovations, but some jobs are best left to the pros. Anything structural or major gas, electrical and plumbing work is best outsourced. Purchasing fixtures and plumbing yourself might not be the cheapest option either, as tradies can usually get trade discounts.


The Election Fallout: The Jacinda Effect


As the country wakes with an election hangover, what does the new government mean for New Zealand’s runaway housing market? Alex explores.


Since Jacinda took the helm a few weeks ago we’ve been getting many questions along the lines of:

·      How will a Labour government change the housing market?

·      What will it do to house prices and interest rates?


As you will well know, house prices have been heading north for the last couple of years. Great if you own property; not so great trying to get on the ladder. One of Labour’s main pre-election promises was to curb this and fix the housing crisis by building more homes, reducing foreign buyers and creating somewhat of an equilibrium in the housing market.[1]



Will this cause house prices drop?


Who really knows, but, best guess: it’s highly unlikely. Demand has fallen recently (see the Auckland stats for example[2]), but there also has been a reduction in supply (listings are as low as ever and the spring surge of houses coming on the market has just not been happening). This lack of supply helps to keep the pressure on house prices.


Some areas in New Zealand have been over-inflated, but … most areas are just playing historic catch up after a number of years of no growth at all.[3]


As to banning foreign buyers to relieve pressure … the forecasts from economists and investors is that it will have little to no impact (see Australia which has similar policies already in place). According to LINZ, the number of foreign buyers is actually very small and only affects purchasing of existing houses.[4] [5]


What will interest rates do?


New Zealand interest rates are influenced from events offshore. The European central bank just reported that European banks can sustain low levels of interest for the next couple of years. The Bank of England is looking to increase its base interest rate[6] and this is also the trend in the US.[7] 


So, will the New Zealand Reserve Bank adopt similar policies? No one knows. Maybe Peters will cause a stir with the Reserve Bank Act.[8] Besides this, economists say it is unlikely for interest rates to change too much, as other factors like net migration, unemployment and the financial outlook of New Zealand are all very positive.


This piece is a little more formal than normal from me, but these are the questions and answers we’re getting and giving on a daily basis. Feel free to discuss any of this over a cup of coffee with me.


Alex Barendregt is 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.












Brendon's Bathroom Budget Blowout


Renovating the home you own rather than buying the house you may not be able to afford is an attractive option right now. But it’s not without its pitfalls … as Brendon found out. 


House-price inflation has two impacts that I want to reflect on:


1. People who own property feel richer ... because their house is worth more.


2. People are opting out of purchasing a nicer home. They are concerned about the cost of the new house, what their new mortgage would be and the risk that their house might now sell and they won’t be able to buy again. (As an aside, we may be able to help with the last one.)


So, what do we do when we already own a house but we don’t want to upgrade?


We renovate!


This can be a good option. Why not get your house into a state you are happy with and actually get to enjoy it—much better than just getting it there a week before you sell it and move out? Of course, the downside is the mortgage gets bigger rather than smaller over time.


I found myself in this situation this year and now have two new bathrooms, new carpet, paint and curtains. Yee ha!


However, here are some important life lessons learnt along the way:


1. Do your figures. Then double them.


2. Estimate the time frame. And then double it ... at least.


3. Remember all those extra things you might like to get your builder to do. Bigger cavity sliders, recessed shelving in the shower to put your shampoo in, extra lights—it all costs more money and can blow budgets (see 1 and 2).


4. When I did my figures, I asked myself, "How much can I get a toilet for? $500?”. Somehow I decided to buy the $1200 one. And, yes, we do need a black flush plate thing to match the black taps (see 1).


5. Tradies are busy right now and in to the foreseeable future (see 1 and 2).


6. If you are going to stay put for 10 years, design the house how you want to live in. For example, don't put a bath in just because it will “add to resale value” if you or your family aren't “bath” people. In 10 years, your bathroom will be tired and may need another make over anyway.


Several lessons learnt, but loving the new bathroom and its colour coordination!


Brendon Ojala is 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.




Fixed vs Floating: What will Labour mean for our rates?


Is the arrival of a left-leaning government the catalyst for a hike in interest rates? Brendon explores possibilities and shares his tips for fixing and floating.


Pre-election, the common wisdom from those in the know was that interest rate hikes would be slow at best and would take a while. So, the recommendation for most was to fix for a year (and take the cheapest rate in the market). What has changed since then now that we have a Labour-led government?


Well, our mortgage rates are influenced by different things. The floating rates and short term fixed rates, are heavily influenced by local factors like elections and inflation. 


It seems the new government will spend more than the previous and the prediction is that this may mean more inflation pressure, which will likely lead to a lift in the OCR and short term interest rates. (Unless, of course, Winston is correct and there is an economic storm brewing …  in which case, not so much.)


The longer rates (three- to five-year fixed rates) are more heavily influenced by overseas factors, particularly US interest rates. They are nudging up, so watch what this space.


Despite the banks being pretty tough on new home loan applications, there is some competition between them, particularly in the two-year rate. One bank is offering 4.3 per cent for two years, which others have been struggling to match (at time of writing—however, watch this space).


If you can afford for your mortgage payments to increase a bit without hardship, lots of our clients are willing to take the risk and take the best rate for now (the one-year rate). Others are more cautious, so are splitting their loans between several fixed rates (leaving a little floating) or just opting for a two- or three-year rate in order to have certainty for a little longer.


As you can see, it isn't straight forward. Different decisions should be made on your interest rate strategy depending on your situation.


If you are a regular reader you probably get sick of me saying this, but I repeat because it is true and important: spend more time thinking about your debt reduction strategy rather than small differences in interest rates. The former is FAR more significant for getting ahead than the latter.


Your Velocity adviser can't predict the future, but they can work with you to put a good strategy in place. So, don't hesitate to make contact when your fixed rates are due to rollover. And keep in mind, don't just ask us "What interest rate should I take?" The best question is always "How can I get rid of my mortgage faster?"


Brendon Ojala is 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.





Update on the Sovereign Insurance sale

New Zealand's largest insurance company, Sovereign (of which Velocity Financial supports), has been sold with the new buyer being AIA. 


This sale will be finalised mid next year. Sovereign's history to become New Zealand largest insurer has involved amalgamating 27 companies (I think that's the number) into one big one. So this is another step in that process of a smaller insurer being absorbed into an even larger company.


What does this mean for you?


All existing policies and conditions will be honoured as they are legal binding contracts. In the insurance land, this purchase is viewed as a good thing with improvements for clients to come.


We will certainly be keeping all existing Sovereign clients up to speed.