If interest rates increase by 2%

[Keith and Linda]

Sounds like you're doing fine with an investment property too.

 

Yep I upped the repayments (longer term strategy), however it does also mean that I have been paying more tax on it too, the Government getting a return on the initial help it gave me! fairs fair though!

[newjez]

There were some that told me the same thing in 2003 when I first bought a house. I am glad I ignored them..

 

My house has doubled since 2009. That isn't justified or sustainable. The UK will correct if we leave Europe. It will eventually correct if we don't; by 2020.

[newjez]

and 1998, 1991, 1988, and.............. or there abouts

 

Thought the UK did correct in the 90s?

 

It's only a problem if you are forced to sell at that point in time.

[Parley]

I had a line of credit account years ago.

The trouble with these accounts is they typically charge a higher interest rate than a more basic account.

 

I now prefer a simple home loan account with redraw option. This usually has interest rate about half a percent less than full bells and whistle line of credit account.

Also you are more prone to overspending when you put everything on credit card and transfer from Line of Credit at end of month.

[paisleylass]

Yup, I had an early discussion with NAB about mortgage options yesterday, and it turns out their best interest rate is the basic variable rate. No offset, but also no fees and redraw available. So if you were to whack all savings into the mortgage account, it has a similar effect to offsetting, and you can use that money anytime by transferring.

 

However NAB's lowest rate is not the best around, so we'll keep looking.

 

Hopefully by the time interest rates rise significantly, we'll have halved the mortgage or better, so won't be too painful.

[Parley]

My loan is with NAB and redraw is simple. You just transfer it within Internet Banking. Minimum redraw is $2000.

 

I am very happy with NAB.

[Keith and Linda]

I had a line of credit account years ago.

The trouble with these accounts is they typically charge a higher interest rate than a more basic account.

 

I now prefer a simple home loan account with redraw option. This usually has interest rate about half a percent less than full bells and whistle line of credit account.

Also you are more prone to overspending when you put everything on credit card and transfer from Line of Credit at end of month.

 

I cannot recall it being a higher interest rate, however even if it was slightly higher, if used correctly and adjust some lifestyle choices to suit then the savings made far far out weigh any small interest rate difference. Paid our mortgage off in 5.5 years when expecting 20! and before folk start saying about the better wages here, that 5.5 was when we first came over and my salary was only half of what I had in UK.

One only has to be thrifty at the beginning, once you start to see how quick the mortgage comes down and hence how little interest is charged the whole process can really speed up.

The potential problem would be self discipline.

[Parley]

I cannot recall it being a higher interest rate, however even if it was slightly higher, if used correctly and adjust some lifestyle choices to suit then the savings made far far out weigh any small interest rate difference. Paid our mortgage off in 5.5 years when expecting 20! and before folk start saying about the better wages here, that 5.5 was when we first came over and my salary was only half of what I had in UK.

One only has to be thrifty at the beginning, once you start to see how quick the mortgage comes down and hence how little interest is charged the whole process can really speed up.

The potential problem would be self discipline.

 

You will have been paying a higher rate for the priveledge.

You could have achieved the same or better with a basic account I believe.

[Keith and Linda]

Thought the UK did correct in the 90s?

 

It's only a problem if you are forced to sell at that point in time.

 

The dates are not the point (they were just plucked out of the air) the gist of it is when is the best time to buy? somebody will always say it is not. I understand the only if you sell but when interest rates went sky high and redundancies around some are forced to sell and some were forced out and some acted foolishly (and still do).

[paisleylass]

My loan is with NAB and redraw is simple. You just transfer it within Internet Banking. Minimum redraw is $2000.

 

I am very happy with NAB.

 

I like NAB and service has been great with one cockup in 4 years, when rent bpay went out late. But the other option we're looking at (ING Orange everyday + advantage mortgage + savings maximiser) has so many pluses and savings for us, we'd be daft not to go for it. For example savings interest would be double what we get with NAB, though that won't be an issue once we draw down mortgage. 1% cash back on mortgage repayments - not much per month but worth having! And cash back on paywave and cashout transactions. Not to mention 0.24% lower mortgage interest. All up we'd be a couple of k a year better off, which is worth having.

 

Considering opening a joint account with ING, having one salary paid in, transferring savings over but keeping NAB open for a while as the other salary account, to make sure ING isn't actually rubbish!

[Parley]

I like NAB and service has been great with one cockup in 4 years, when rent bpay went out late. But the other option we're looking at (ING Orange everyday + advantage mortgage + savings maximiser) has so many pluses and savings for us, we'd be daft not to go for it. For example savings interest would be double what we get with NAB, though that won't be an issue once we draw down mortgage. 1% cash back on mortgage repayments - not much per month but worth having! And cash back on paywave and cashout transactions. Not to mention 0.24% lower mortgage interest. All up we'd be a couple of k a year better off, which is worth having.

 

Considering opening a joint account with ING, having one salary paid in, transferring savings over but keeping NAB open for a while as the other salary account, to make sure ING isn't actually rubbish!

 

Have a look at UBank too. Which is owned by NAB but fully online.

There rates are very good.

 

I think ING's cash back on paypass transactions may only be for 6 months ? But it does sound good.

 

Just compare to ubanks savings rate and mortgage rate also.

[Guest]

I like NAB and service has been great with one cockup in 4 years, when rent bpay went out late. But the other option we're looking at (ING Orange everyday + advantage mortgage + savings maximiser) has so many pluses and savings for us, we'd be daft not to go for it. For example savings interest would be double what we get with NAB, though that won't be an issue once we draw down mortgage. 1% cash back on mortgage repayments - not much per month but worth having! And cash back on paywave and cashout transactions. Not to mention 0.24% lower mortgage interest. All up we'd be a couple of k a year better off, which is worth having.

 

Considering opening a joint account with ING, having one salary paid in, transferring savings over but keeping NAB open for a while as the other salary account, to make sure ING isn't actually rubbish!

 

ING direct are great. I save several hundred dollars a year on cash back on paywave purchases and all ATM's being free. Our loan rate is also around 4.15% which is pretty competitive.

[Keith and Linda]

You will have been paying a higher rate for the priveledge.

You could have achieved the same or better with a basic account I believe.

 

I think not parley however it does work at it best when one is weekly paid. I will try and offer a simplistic explanation. based on say $1000 a week pay.

Week one $1000 is paid off the mortgage so this means $1000 worth of less interest for the next 4 weeks

Week two another $1000 is paid off the mortgage this will run for the next 3 weeks

Week three again but for two weeks

week Four again but for one week.

end of week four you pay your credit card off in full from the line of credit which if been careful should be less than the 4 weeks of pay whatever is over that credit card is reducing the mortgage.

Effectively in one month one has saved interest on $1000 for 10 weeks plus any saved at the end of the month. Also means that every dollar of your wage every week is working to reduce your interest repayments.

[paisleylass]

Have a look at UBank too. Which is owned by NAB but fully online.

There rates are very good.

 

I think ING's cash back on paypass transactions may only be for 6 months ? But it does sound good.

 

Just compare to ubanks savings rate and mortgage rate also.

 

had a look and I think ING has the edge, with all its other features. The SVR is a little higher than ubank discounted, but with all the other cashback gubbins I think it's slightly better for us. And at least psychologically, I prefer offset to redraw, cos the money is kept separate. With redraw I'd feel a bit like we were nicking money from the house heheh.

 

cheers lastonealive, that's a good recommendation to have, I have seen bad reviews of ING online, but then there are worse for NAB who we've found great!

[Parley]

Thanks Keith.

Yes I am familiar with how they work.

My understanding based on NAB anyway is that the rate of these accounts is about 0.5% higher than a basic account.

 

I am unsure whether the operation of this account does more than make up for the higher interest rate.

I\ll take your word for it that it does.

[Keith and Linda]

Thanks Keith.

Yes I am familiar with how they work.

My understanding based on NAB anyway is that the rate of these accounts is about 0.5% higher than a basic account.

 

I am unsure whether the operation of this account does more than make up for the higher interest rate.

I\ll take your word for it that it does.

 

The example was not specifically aimed at you parley but there are many that do not really understand it, hope it helps some hey?

[Keith and Linda]

Thanks Keith.

Yes I am familiar with how they work.

My understanding based on NAB anyway is that the rate of these accounts is about 0.5% higher than a basic account.

 

I am unsure whether the operation of this account does more than make up for the higher interest rate.

I\ll take your word for it that it does.

 

Mine appears to be 0.36% higher

[newjez]

The dates are not the point (they were just plucked out of the air) the gist of it is when is the best time to buy? somebody will always say it is not. I understand the only if you sell but when interest rates went sky high and redundancies around some are forced to sell and some were forced out and some acted foolishly (and still do).

 

 

If you follow the market and the economy, it's then some times are better to buy than others. But it really comes down to personal circumstances. Is your job secure? Are you about to have kids and lose an income? Can you survive interest rate rises?

 

I wouldn't buy in south east UK right now, regardless of the above, as its getting silly. At least till post brexit anyway.

 

And interest rates could go up sharply 2020, so lock for as long as you can.