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Is it now time to make hay while the sun shines?




Much of the financial commentary in recent times has focused on the Reserve Bank’s determination to keep interest rates low, and so ease the debt repayment hurdle for businesses and individuals - and therefore stimulate financial growth in these challenging times.


The relationship between our central bank and the main banks may involve the use of negative interest rates and other tools - so making it cheaper for the banks to lend.


Economists are predicting that interest rates may dip below 2% over the year ahead with fixed terms staying below current levels for the next two or three years.


So, how do we make hay while the sun shines?


Well, there are some things that could well be very helpful:


· When fixing an interest rate term consider a 12 month term to “catch” lower rates later

· When re-fixing interest rate terms keep paying the same instalment to accelerate principal repayment

· If at all possible pay a little more than the minimum instalment (some rules apply)


As always “what goes down must go up” so be prepared to take advantage of the current low interest rate environment to make the adjustment to higher interest rates later - that much easier.


When we’re looking at borrowing it can pay to ask that question “are all banks the same?” The reality is there can be subtle differences that can make borrowing a little easier.


Some of those differences can involve the loan term a lender is prepared to offer or the way some forms of income such as rental or boarder income are treated.


Having said all that when looking to borrow again - why not just give us a call and make the paperwork that much easier!


Call us on (03) 281 8605 or email:


jerome@thompsonmcneill.co.nz

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