[CJ22]

http://www.nzherald.co.nz/metro/story.cfm?l_id=117&objectid=10500928

This all makes depressingly grim reading...

"The change is hurting huge numbers of average Kiwis with mortgages, among them first-time owners Lee Potter and Lori Clearwater.

The west Auckland couple both work 50 hours a week, with a combined annual income of $120,000, but are crippled by weekly mortgage payments of over $900 for a $375,000 house. Starting a family is out of the question, while holidays, Sky TV and a social life are also off the agenda, as the couple budget down to the last dollar.

They are weighing up a move to Australia where, even if they lost money on the sale of their home, Potter estimates they could double their income and quickly end up better off. Sick of forking out "dead money" in rent, the couple approached banks for a 100 per cent $375,000 loan when the Sunnyvale house next door to Lori's mum came up for private sale."

[IanW99]

It reads just like a newspaper article fishing for a story when there isn't one or at least talking to people who don't really have a problem!

"We would have needed a $32,000 deposit and it was just too hard to try to save that amount."

Before becoming homeowners, the couple had money to spare, but the mortgage has put a stop to that - and their social life.

So they had money to spare but it was too hard for them to save it for a mortgage deposit, why? was it just too easy to spend?

One client had a combined income of $140,000 but were grappling so hard with a huge mortgage, holiday home, leased car and two sets of private school fees that feeding the family had become an issue.

Wow, how to get your priorities right, let's spend all our money on things we don't need and then don't leave any for food, d-oh!

I'm sure that its a serious problem for some, just not these people. :exit

Ian

[CJ22]

No, I LOLed at that too. But still, the interest rates are no joke, and nobody seems to be suggesting that they're going to come down rapidly.

[Ojai]

These interest rates make our $300/wk two bedroom near the train station look better and better, and are why we are buying a single runabout instead of a nicer financed car.

I think it's just about being smart where you put your money, really.

[Peter&Liz]

These interest rates make our $300/wk two bedroom near the train station look better and better, and are why we are buying a single runabout instead of a nicer financed car.



Renting does seem a hell of a lot cheaper than a mortgage.

And may well be the smart long term move if BNZ forecast of a 10% drop in house prices proves tobe correct.

http://www.radionz.co.nz/news/latest/200804040606/12bd0df7

Peter

[CJ22]

Our plan as it stands is to rent or 2-3 years (from October) while we find our feet. It sounds like that timing might be appropriate, if prices drop and bottom out in couple of years, whilst in the meantime we've benefitted from a high interest rate on our saving and cheap rent. Tough for those with houses and no equity though.

[Moorf]

On the NZ news last night they were talking about NZ property currently being overvalued by around 30.. YES THIRTY... percent....

[Paul Blears]

Work the figures out....even paying at 10% over 25 years, the correct figure is in the region of $900 per MONTH!!! Someone at The Herald can't count!!Paul.

[ellenmelon]

you can move to australia, and get a house for cheaper or with a mortgage that is more managable but it seems to have to live further out of the CBD. my family lived half an hour (by fantastic light rail) out of perth city and their house was a small four bed (2 dbl 2 sngl) with small back yard. it was rented but my aunts house was similar ,which she owns.but, you know that was just their experience.

Edited to add : was looking at houses for sale where my family are living in ireland and jeez...pretty cheap compared to here! and they have radiators. lol.

[Peter&Liz]

Our plan as it stands is to rent or 2-3 years (from October) while we find our feet. It sounds like that timing might be appropriate, if prices drop and bottom out in couple of years, whilst in the meantime we've benefitted from a high interest rate on our saving and cheap rent.

I'm thinking along the same lines, wait till the market has settled before buying as renting is so cheap in comparison.

If you are willing to have your money tied up for 12 months plus you can get above 10% interest. And from what I have seen on TradeME I'd guess that rents are around the 5% mark of property value.

Peter

[Moorf]

$900 per MONTH!!! Someone at The Herald can't count!!

So how does that work when a $240k-ish mortgage is around a grand a fortnight???

[kzn2nz]

Wouldn't $900 per month be pure interest?

I am a bit confused because just the capital amount over 20 years on a $375000 house works out at $360 per week.

Just for interest - I am paying 14% at the moment in South Africa. Ouch!!!

[CJ22]

Peter, what did you have in mind that paid more than 10%?

I wonder if NZ has the equivalent of mini-ISAs or similar.

[Paul]

So how does that work when a $240k-ish mortgage is around a grand a fortnight???

Very basic calucaltion at 10% interest rate puts interest only element of the $375k mortgage at about $720 a week so $900 doesn't seem unreasonable for a capital and interest repayment?

If it was $900 a month I would be raising some finance in NZ as would be very cheap!!!

[Peter&Liz]

Peter, what did you have in mind that paid more than 10%?

I wonder if NZ has the equivalent of mini-ISAs or similar.

I don't think NZ has the equivalent of an ISA but maybe someone already in NZ could answer that point.

I took a quick look at term deposits in

http://www.interest.co.nz/term2.asp

And there are a number of companies offering more than 10% if you are willing to have your cash tied in for 1 year.

You would still be liable for tax but if one of you was not working this could be as low as 19%.

At the moment with the exchange rate being not great from a UK going to NZ point of view, might be worth putting your cash in an offshore sterling account as the lower interest will hopefully more than be offset by sterling appreciating against the NZ dollar..

Alliance & Leicester are doing one @6.3%.

Peter