House Prices Cheaper Now
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| 1 | If you look at the overall price paid for a house over an average mortgage of 25 years its actually cheaper or the same now. e.g. 400,000 home over 25 years at 9% = total 1,000,000 Low interest rates are to blame for increased house prices but you end up paying the same. loud_37 - 2020-12-07 18:32:00 |
| 2 | when we built this house 12 ish years ago, the interest rate was 9.5% now it is less that half, and its like mortgage? what mortgage. the payments are hardly noticeable. heather902 - 2020-12-07 18:38:00 |
| 3 | If interest rates increased in example A it might be "hardly noticeable" funkydunky - 2020-12-07 19:20:00 |
| 4 | Govt cannot just keep printing money. Interest rates will go up to at least historical levels in the next 3-5 years. tony9 - 2020-12-07 21:07:00 |
| 5 | tony9 wrote: thats what I thought but seemingly they can, look at America - printing money since GFC...... Talk about backing us all and our kids in a corner with no where to go. The world is a mess. Forget climate emergency, a fat lot of good that will do when we are all living under bridges coz houses are too expensive. The problem with the planet is too many people and GREED. lakeview3 - 2020-12-07 21:14:00 |
| 6 | loud_37 wrote: my first house $102,000 interest rate 12.5% and almost mortgage free in 6 years - Auckland too. So yeah nah your figures don’t tally up. Much harder these days, even with the low interest. lakeview3 - 2020-12-07 21:16:00 |
| 7 | heather902 wrote: so ramp up the payments and get rid of the mortgage... lakeview3 - 2020-12-07 21:17:00 |
| 8 | lakeview3 wrote:
we did, that payed for the new car we needed (flexi mortgage), this year, and next year house needs painting. its a drop in the bucket really, would rather do the things we need to do.. maybe i the interest rates stay low we can get rid of it in 5 years. Edited by heather902 at 9:23 pm, Mon 7 Dec heather902 - 2020-12-07 21:22:00 |
| 9 | lakeview3 wrote:
Yeah I agree get rid of the debt as quick as possible, that's why I said an average mortgage which tends to be over 25 years. loud_37 - 2020-12-07 21:24:00 |
| 10 | loud_37 wrote: Of course this doesn't stack up as the purchaser of the $ 400,000 home will also now be paying 2,4%... sparkychap - 2020-12-07 21:28:00 |
| 11 | loud_37 wrote:
Really? It’s not the fact that demand (through increased population) exceeds supply? pico42 - 2020-12-07 21:34:00 |
| 12 | heather902 wrote: we are on track to pay ours off quicker due to the low interest but then I am still driving around in the same car I have had for 14 years lol. I basically want to hang onto it for as long as I can. Then I want (haha) a Toyota Highlander and NO ONE else is allowed in it! ???? so once the mortgage is down I will be saving for my new car (dreams are free lol) We also pay our mortgage on a straightline reducing mortgage which is by far the quickest way to pay it down and the least amount of interest. Most people have never heard of it. It’s how we got the first house down so quick, but then of course I had my divorce and had to start again with half the money. I could have been mortgage free on that years ago but we upgraded the size and area and are happy to live here in our low maintenance warm house for the rest of our days if we can. Edited by lakeview3 at 9:36 pm, Mon 7 Dec lakeview3 - 2020-12-07 21:35:00 |
| 13 | As for my Toyota Highlander.....I will probably end up with one of those hideous nana shopping trolley cars that I despise so much!!! Haha! lakeview3 - 2020-12-07 21:41:00 |
| 14 | lakeview3 wrote:
I looked up that mortgage type and it says your payments go down over time. If you want to pay it off faster, wouldn't you be better to keep your payments high so more principal gets paid off? tygertung - 2020-12-08 06:45:00 |
| 15 | tygertung wrote: yes that’s right, but that depends if it’s floating or fixed, currently ours is floating so if we get any extra $$ we can put it on the mortgage and pay if off faster. It did suit us when we had 3 kids at home that the payments got less and less. It meant we weren’t too stretched. However every time the fixed period came up for renewal we upped the principal payment to compensate for the lesser amount of interest. It’s just suited us anyway and once the debt gets quite low, you can really get it down quicker and pay off faster. It’s not the kind of mortgage that would suit a large loan though because the payments at the start would be too high. Not many banks offer it these days anyway. Probably because the mortgage amounts are so huge. My first mortgage in 1993 was 86K and I remember we used to pay $1600 a month (interest of 12.5 % included) in mortgage which was quite a lot back then so you can see why we paid it off quickly. It did take a lot of discipline though not to waste money on other stuff. So worth it, even after the marriage split, i still had a good amount to come down here and buy myself a house. Edited by lakeview3 at 8:11 am, Tue 8 Dec lakeview3 - 2020-12-08 08:10:00 |
| 16 | We're assuming that all buyers use mortgage. A lot of international buyers and speculators are cash buyers who do not care about mortgage rates. In the UK they estimate 35% of property buyers are cash, and these are the buyers that drive up bidding prices in house auctions. So generally houses are more expensive now regardless of interest rates. mone - 2020-12-08 11:38:00 |
| 17 | mone wrote:
Labour banned international buyers, remember? (or was it just those with Chinese sounding names?) Difference made : none. Edited by loose.unit8 at 12:05 pm, Tue 8 Dec loose.unit8 - 2020-12-08 12:04:00 |
| 18 | Would local buyers see housing as a savings account for retirement. Buy whatever and they assume every house will go up and double every 8yrs. If they cannot finance it just flick it off and tax is only on a proportion on it on the capital gain anyway. Edited by rayonline_tm at 12:56 pm, Tue 8 Dec rayonline_tm - 2020-12-08 12:56:00 |
| 19 | Cash buyers don't care about interest rates. Which might explain why Reserve Bank fiddling with rates has no cooling effect on the market. They are ignoring the cash buyers that really push up the bidding. mone - 2020-12-08 14:51:00 |
| 20 | mone wrote:
Interest rates reducing make it cheaper to borrow and increases the amount able to be borrowed so therefore increases demand and what people are able to pay so throws fuel on the housing market fire, it certainly doesn't cool it. What's up with your prejudice against cash buyers? Isn't a "cash buyer" just a person who has no house to sell so therefore has very few conditions? Edited by loose.unit8 at 3:02 pm, Tue 8 Dec loose.unit8 - 2020-12-08 15:01:00 |
| 21 | mone wrote: Why would cash buyers push up the bidding? Does the lack of a mortgage equal lack of common sense? sparkychap - 2020-12-08 16:43:00 |
| 22 | loose.unit8 wrote: bryalea - 2020-12-08 16:47:00 |
| 23 | loose.unit8 wrote: Not really. A cash buyer is one that doesn't need a mortgage. sparkychap - 2020-12-08 16:58:00 |
| 24 | This message was deleted. kittycatkin - 2020-12-08 18:51:00 |
| 25 | kittycatkin wrote: But did you need a mortgage for the new house? sparkychap - 2020-12-08 20:32:00 |
| 26 | kittycatkin wrote: Or HNZ buying up properties. And they pay top dollar. pcle - 2020-12-09 07:21:00 |
