It’s never been a better time to buy a property in New Zealand. Interest rates are at an all-time low which means that right now could be a good time for you to start attending open homes again with an eye on one thing: investment.
Before you start thinking about building a nest egg you should focus on what you currently have and make sure that you’ve got the best rate possible. Refinancing a mortgage is a big decision that could save or cost you tens of thousands of dollars in the long term so naturally, you want to get it right. A savvy broker should be your first port of call as they have their head in the game and will help you make the right decision.
Cost of breaking your current mortgage
You may still be in the last stretch of a fixed rate that was locked in a few years ago. Refinancing can sometimes be costly if you haven’t run through to the end of your mortgage term. A quick cost-benefit analysis will determine whether you will be making those sweet savings with the lower rates.
To float or fix
Floating mortgage rates have been very cost-effective over the last few years however, in recent months as interest rates have dropped it has become more attractive to fix a mortgage. This is due to mortgage rates being at historic lows, making it an excellent window of opportunity to nab the great rates.
Purchasing a first, second or fifth property
Low-interest rates are making housing affordable for many people. They also make purchasing an investment property a viable option as the potential for return is much higher. It’s always a good idea to talk to a financial advisor and a mortgage broker first to help you decide how much you want to leverage before assessing potential investments.
Here’s how much deposit you’re going to need
As a rule, you will need a 20% deposit for an investment property purchase. If you have an existing property, you may be able to use your equity to cover more of the deposit. With the new LVR lending rules, you can use the equity in your current property as a deposit for your investment. The type of property you purchase is going to determine the size of deposit you’ll need so you’ll need to speak with one of the friendly agents at Tommy’s who will walk you through it.
Where to buy
Location, location, location! Housing prices in Wellington have been rising steadily since 2014 so you need to understand your appetite for risk. A great thing about the Wellington market is the high demand for rental properties which drives rental yields up.
Today you can have an investment property AND eat avocado on toast
Markets move down and they move up so it’s a certainty that mortgage rates will one day return to much higher rates. If you are purchasing your first house or are in the market for an investment property and have saved up the deposit overseas, now is as good a time as ever to transfer your deposit over to lock-in the great rates.
If you’re going to make hay while the sun shines make sure you use a reputable online money transfer company like OrbitRemit to move your hard-earned capital back to New Zealand.