Why use an Adviser? Here’s an example.
In December 2008 the OCR was 5%, and in the period July 2014 to April 2015 it was set at 3.5%, dropping to 1.75% in Nov 2016 before it crashed to 0.25% in March 2020.
Unprecedented times have seen the rate hold at 0.25%, and if NZ had not had an incursion of the Delta variant we may well have seen the OCR begin to rise. It has been such a long time since we have seen it rise that many have forgotten the days of high interest rates. My first mortgage had an interest rate of 14%, and others will remember the days of 20+% interest rates.
Anything under 5% is magic, when you look back at those historical rates. ANZ had put their interest rates up in anticipation of the OCR increasing and did the honourable thing of dropping the rates when the OCR did not rise. Believe it though: the interest rates will be increasing as the economy is recovering to our new normal. Unemployment is low and inflation is starting to kick in.
The banks have been making things easier for us by putting tools into our online and mobile apps to allow us to refix our rates without needing to talk to anyone. As Kiwis we love this as it appeals to our DYI attitude. The banks love it as they don’t need to use their staff to do anything. The cost is ALL on you.
Recently I worked with a client who was thinking that they should use the online app to fix their loan and were about to do so when we had a chat. The result of our chat led to a restructure of their loan, and the result is that they are now going to take 6 months off their loan term. They are paying no more than they were paying previously, and they are now making the most of their money. It is not costing them anything more and as well as clearing their debt faster they have more certainty, and they don’t have to change any of their current ways of living. And there is more we can do for them.
This is the advantage of financial advice. Financial Advisers understand the various products that Lenders have and will match you and your money habits to the best provider and the financial tools that will get you to your goals. This is what we love about our work, making sure that our clients get the best deal possible. Let us help you! Book an appointment at the Calendly link at the bottom of the page or send us an email or a message through our Contact Form. We’re looking forward to hearing from you!