Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

More To 4.95% Rates Than Meets The Eye


22 November, 2001
MEDIA RELEASE

More To 4.95% Rates Than Meets The Eye

People need to consider the hidden fees and costs attached to the attractive offers from lenders of 4.95% pa on six month rates warns Paul Bravo, Head of Home Loans for Sovereign Limited, New Zealand’s largest non-bank home loan lender.

“People attracted to the current special deals, need to consider the long term effect. For example, the cost of refixing their home loan in six months time, and the likelihood of having to pay a higher interest rate then.

“Our experience has shown that less than 2% of our customers choose the six month term. Locking into a rate for six months is not going to protect them from increasing rates through a complete interest rate cycle. Our research has determined that borrowers want the certainty that a fixed rate provides for longer than six months,” he said.

Mr Bravo says Sovereign believes that a medium to long-term outlook would actually give better returns, even though the short-term rates may seem appealing.

“These six month rates often contain fine print of establishment fees, or application fees which make them prohibitive for borrowers over such a short period of time.

“When you dig deeper you find out that these loans usually have a non-negotiable fee of around $500, and if you want to take out another fixed rate at the end of the fixed term you could also get charged a redocumentation fee of as much as $300. For most people this more than offsets any savings made from the lower interest rate. People need to consider the complete cost of the home loan, not just the interest rate.”

“Our research and experience supports Sovereign’s philosophy, that is we always deliver our customers a flexible home loan product that has no-ongoing fees with consistently competitive and transparent interest rates. With the abundance of ‘deals’ out there at the moment, we’re cautioning people to watch out for short-term pitfalls with long-term ramifications,” he said.

Ends


Released on behalf of Sovereign by Network Communications (ph: 09- 379 3154).

For further information, please contact: Paul Bravo, Head of Home Loans,
Ph: (09) 487 9884.


SOVMR015

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

In Time For The Cup: Spark Sets 5G Date, Without Any Spectrum

Spark chief executive Simon Moutter has a big hairy audacious goal, to get the company's 5G mobile network up and running by July 2020 ... More>>

ALSO:

Mesh Mess: Commerce Commission To Appeal Steel & Tube Sentence

The Commission has today filed an appeal against the sentence imposed on Steel and Tube Holdings Limited (Steel & Tube) for false and misleading representations about steel mesh products. More>>

"Bipartisan Inaction": Rapid Rent Increases

The median nationwide rent has gone up $20 a week over the past two month, a rapid increase that is part of an upward trend overseen by both Labour and National Governments... More>>

ALSO:

Income Equality: Time To Double-Down On Cutting CEO Salaries

With reports of a slow-down in CEO pay rises last year, it’s time for Kiwi corporates to double down on cutting excessive salaries to ensure this is a trend not an accident, said Peter Malcolm, spokesperson for the income equality project Closing the Gap. More>>