10/05/2024
๐ Is a 5.99% fixed rate for 3 years a good deal? Let's break it down!
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๐ Some might say that 5.99% for a three-year fixed mortgage isn't the best rate out there, especially with chatter about declining interest rates. However, it's crucial to look beyond just the current rate and consider the overall cost over time.โฃ
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๐ Here's the math:โฃ
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- With a 5.99% fixed rate for three years, your total interest rate sum is 17.97%.โฃ
- Comparatively, the current 1-year rate stands at 6.85%. For opting for a shorter term to be advantageous, the following 2-year rate would need to drop to 5.56% or lower next year to match the three-year total of 17.97%.โฃ
- The current 2-year rate is 6.65%. To benefit from this shorter term, you'd need the 1-year rate in two years to fall to 4.67% or less to equal the three-year fixed rate total.โฃ
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๐ก Why choose the 3-year fixed rate?โฃ
By locking in at 5.99%, you avoid the uncertainty of relying on significant rate drops in the coming years. Consider setting your repayments as if the interest rate was 6.85%โthis approach not only gives you the certainty of fixed payments but also helps you pay down the principal faster, reducing your total mortgage cost when the term ends.โฃ
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๐ฆ Tailored Mortgage Adviceโฃ
Every financial situation is unique. If you're disciplined with your finances and expect a positive cash flow, we can explore other structuring options, like varying the loan terms, to better suit your financial goals. Our team is here to discuss all possible scenarios with you to ensure you make the best decision for your future.โฃ
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๐ Contact us today to discuss your mortgage options and find out how you can secure your financial future with the best strategies tailored to your needs!โฃ
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Visit https://www.mortgagesaver.co.nz/ to find out more.
