interest rates drop even further

It's depressing watching the interest rates drop when you are on a fixed term. The media keep spouting on about how its great for all home buyers when in fact it's not really. Most people are on fixed terms so there is no benefit unless yours is up for renewel. We have another 18 months to go on ours

yeah they were talking this morning on the news about refixing etc..
saying it may be worth while to break you agreements

We are stoked ours is up in March - so we are probably just going to float from then on and see what happens.. then when we get a rate we like fix it in

Some peoples contract to break would cost them $30k!

I remember a few years ago when the banks paid YOU if you broke the contract!

If you'd save 40k by breaking the contract then thats close to what it would cost you to break it - no way would it be only $1500. We looked at this last time it dropped, and decided just to draw down off our flexi portion to put the maximum lump sum allowed without fees onto our fixed portion (our flexi rate is now lower than our fixed). The only way you'd save money by breaking a fixed term loan would be if you paid the fees based on todays rates, and then floated your mortgage for a bit until the rates dropped even further before you re-fixed. Its worth ringing your bank to find out your options though, they can give you the exact figures. Sucks though, watching the rates drop way below what you are stuck on!

We broke ours last week but didn't have to pay anything because the rate we were on was lower than the one we are on now although that will change very shortly I'm so glad we did it when we did because we had another 3 years left of our fixed term. Predictions are that they might come down as low as 6% next year - fingers crossed!

Hi ladies, re breaking your mortgage, my DH is a financial planner and we have just broken our fixed rates. We had $90K on fixed till May 2009 at 9.75% and $100+K fixed till May 2010 at 9.49% To break this and refix all with Westpac (current bank) on 6.99% for 6 months we have saved over $300 per week in repayments and the breakcost for both the above was $4,132 so within 6 months we are better off. To work out the break cost to get an idea of cost, take the interest rate you are currently on ie 9.5% and take the new fixed rate ie 6.9% that 3% diff. Then multiple this 3% by the amount of your loan x the length of time till your current rate is due to expire. Banks add around $300 admin fee per break cost, but we negotiated to $0.   Predictions for rates to be high 5% to mid 6% between April and Aug 2009.    Also if you do not have the cash to pay up front for the break fee, you can always capitallise this into your loan - of course not always advisable, youd need to work out the sums. Another note for the last number of years NZ floating rates have been higher than fixed - this is against the world wide norm. It is predicted you will see floating rates being lower than fixed and evidence of this is already out there ie 6 months fixed rates are cheaper then 2 year which are cheaper than 5 year fixed rates. There are soo many ways to save on mortgages, not only by the rate,, but the structure and how you pay your mortgage - find a good broker and work some numbers. Good luck!

We recently broke ours and set for a smaller term. You can go to your bank and they can put through figures for you if you need help to decide.

Ours was already fixed at 6.99 for 5 years (have 18 months left) At the moment the best rate we could find was for 6.49 for 1 year so not really worth breaking ours, but we are definitely keeping an eye out and watching with interest....hahaha.
I think the less time you have to go the less it costs to break, there is normally a calculation thingy they give you. We broke ours years ago in England for a better deal and that's how they worked it out, so is probably the same here.