Mortgage Renewal time...

Should we fix for 2, 3 or 5 years?

Depends on your offers.

The best offer we had was 4 years, same rate as 3 but locked in more.

I'll tell you if it was a good idea in 3.5 years.

tYeah, am leaning towards 3 years. Dont see things changing a hell of a lot in that time. Only thinngs that concern me with going longer is the inability to change in a few years if our circumstances change dramatically.

We're locked in for another year so I haven't been looking at rates but the reserve Bank are unlikely to raise interest rates with inflation being so low. I'd say get the cheapest loan in offer, or split the mortgage and hedge your bets.

Totally, that's the dance people with 6+ digit debts constantly have to weigh up.

I'm on my first mortgage and while I only acquired it 6 Months ago I still constantly toy up breaking it to go to another bank for lower interest.  To lock in for longer in case out circumstances change drastically too.

There really isn't a right answer except the one you are most comfortable with.

Interest rates may spike dramatically in the next 3.5 years, I have nfi unfortunately.

Put half the mortgage on eighteen months and half on three years, that way if things change in a fifteen months you only have to pay to break half the mortgage. Banks will give you a the month mortgage grace for hardship which buys more time.

or if you're really worried about it get income insurance.

Tony Alexander is always a decent read on this topic. Sure he's BNZ's Chief economist but doesn't really come across as a stooge:

http://tonyalexander.co.nz/wp-content/uploads/2016...

I was at a conference the other week and deputy director of the Reserve Bank indicated rates only likely to drop given current economic environment. As ever it comes with a very big rider that if something big and unsettling happens internationally (a Trump election win, Middle East turning to absolute shark) then all bets are off.  With the level of debt now held by New Zealanders, a rise of 3 or 4 % would be close to catastrophic and the carnage in housing markets would be interesting

the OCR will likely drop 25bp in Nov - but likely to have bugger all effect on mortgage rates given where competition has currently driven them down to

Correct. that is one problem with the "open" nature of the Reserve Bank in that they flag everything well ahead of time and usually the drop is factored in by the Banks before it actually happens. I guess just the general thing is that a rise is very uinlikely with a fall the more likely occurance.

They are of course very aware of getting into negative interest rates as occurs in Japan and parts of Europe now, where Banks charge you for holding your money

Negative interest rates sounds liek the dream.  Borrow to buy 8 houses and just live off the interest.

Locked in for 3 years @ 4.29%.

$75 a fortnight better off! 

ZING!

75 a fortnight is a significant win.

If I were you, I'd still maybe pay $20-25 a fortnight more than you need still to help pay it off faster. Still end up saving $50-55 more than you use too as well.

Yeah, in our old place our mortgage was above 8%, when it dropped down to below 5% we kept the payments the same and the extra equity that we got meant we could move to a much nicer place than we could otherwise afford for our second home.

What we did recently when we refixed ours recently, meant we carried on paying the same amount as we could afford it but thanks to lower rates we are now paying it off a bit faster

Considered doing similar but we kept about 20% of the loan in an Offset mortgage with about a $15k of that amount is effectively Interest Free as it is in a Savings Account that we aren't going to touch unless we need to.