Welcome to our newest feature on nzgirl! We have our very own mortgage doctor, the fabulous and very money savvy Jodi Cottle.
A mortgage broker at Sable Mortgages, Jodi is here to answer all your mortgage questions! She developed a passion for property investment from an early age and has built a solid career in the finance industry both here and in the UK mortgage markets.
If you need a bit of advice and direction, just drop Jodi an email here!
My fixed mortgage comes up for renewal in September and I need advice on what to do next. Do I go for the two year, five year or the floating option. I don’t really want to change my bank but I am concerned that interest rates are getting really high and the thought of paying back 10% scares me. I don’t have any kids (only a puppy and kitten) and both my partner and I are in full time work, so I guess we can afford to be a bit more flexible than someone with kids etc.
However, this is my first house and I am a bit attached to it so I don't really want to lose it. However, if my repayments increased by another couple of hundred per month it would really hurt my beer fund! What do you suggest I do?
Charlie's Mum
ANSWER:
Hi Charlie's Mum,
Oh no, not the precious beer fund! Your concerns about rising interest rates are totally understandable and you should know you're not alone in feeling like this. Never fear, there are some solutions that you can explore that will leave a bit of cash on the side to keep your house AND your beer fund in play.
They are as follows:
1: Part and Part This option allows you to structure your mortgage so it's on different interest rate terms. This means you'll have two mortgage accounts, potentially a one year fixed account and a two year fixed account. This minimises the risk to you and leaves you less vulnerable when your fixed rates expire as you won't have one big lump sum expiring at one time.
2: Interest Only One way to get through a high interest rate storm is to opt for an 'interest only' mortgage for a period of about two years. This option will make your repayments more manageable in the initial years of your new mortgage.
3: Revolving Credit Another option is to split your mortgage into two parts so you have a 'Revolving Credit' (like a big overdraft) facility for say, $20,000 of your mortgage and then the rest of the mortgage on a 'Fixed Interest Only Term'. You would aim to pay off the 'Revolving Credit' facility in the timeframe that the rest of the mortgage is on the fixed rate. Imagine how quickly you could build equity in your home and reduce the overall amount of interest that you pay on your mortgage by doing this.
I hope that gets you thinking about your options! Obviously, I could not recommend a particular strategy for you until I had a bit more information on the specifics. So, what I would suggest you do is obtain some good advice unique to your financial situation as it can save you a lot of money and time.
I am more than happy to discuss this with your further. My mortgage advice service is free, completely unbiased and without obligation. If you want to ensure that you are looked after when it comes to your mortgage, insurance and property requirements, visit Sable Mortgages here
Welcome to our newest feature on nzgirl! We have our very own mortgage doctor, the fabulous and very money savvy Jodi Cottle.
My fixed mortgage comes up for renewal in September and I need advice on what to do next. Do I go for the two year, five year or the floating option. I don’t really want to change my bank but I am concerned that interest rates are getting really high and the thought of paying back 10% scares me. I don’t have any kids (only a puppy and kitten) and both my partner and I are in full time work, so I guess we can afford to be a bit more flexible than someone with kids etc. 
Hi Charlie's Mum,
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I hope that gets you thinking about your options! Obviously, I could not recommend a particular strategy for you until I had a bit more information on the specifics. So, what I would suggest you do is obtain some good advice unique to your financial situation as it can save you a lot of money and time. .jpg){kind=small}