Interest Rates

INTEREST RATES

Interest rates you pay on a loan will vary depending on a number of factors:

- type of loan
- terms agreed with the lender
- how difficult it is for you to get finance;
e.g if you have a bad credit rating you may have to pay more than is standard
- if you can provide security for the loan;
such as a car, boat, household goods, jewelery, property
- what the loan is for; for example - property generally has a lower cost than consumer goods

And ultimately, how much you pay in total, is determined by how long you take to repay the loan.

VARIABLE CONSUMER CREDIT INTEREST

Consumer Goods

• This is the type of loan you would get in New Zealand when purchasing consumer goods on finance.
• The interest is calculated daily on the balance of your loan each day, at the rate agreed in your loan contract.

Pay It Off Sooner

• If you pay off your loan sooner, you can save yourself some money.
• However, it is important to note that some lenders will penalize you for making additional or early repayments.

AT ABACUS FINANCE WE DO NOT CHARGE YOU EXTRA FOR EARLY REPAYMENT OR EXTRA REPAYMENTS DURING THE TERM OF THE LOAN.

HOME LOAN INTEREST

FIXED

Fixed interest doesn't change during the agreed timeframe.
For example, you might choose to fix for a period of 2 years. Most people choose to fix at the best bank rate available, for the length of time that best fits their future plans.

• An advantage of this is that you can accurately work out what your payments will be, and they will not change during the "fixed term".
• Another advantage would be that if the cost increased, you would not have to pay any more during the time your loan is fixed.
• A disadvantage would be that if amount charged dropped you could not take advantage of this.

HOME LOAN INTEREST

FLOATING

Floating is also known as variable or adjustable.

The amount your repayments are, depends on what is on offer at the time.This will probably change on a regular basis, and may go up or down. Floating mortgages can change by tomorrow, but historically they move gradually day by day rather than in big leaps.

• The advantage of floating is that you can pay more than the minimum repayment each time if you want to.
• Another advantage is you are able to re-finance with another lender more easily (subject to terms and conditions of your loan).
• A disadvantage is that in general, in New Zealand, floating will be higher than fixed.

Check out the CURRENT HOME LOAN INTEREST RATES including the Mortgage Trend

MORTGAGE INTEREST RATES CALCULATOR

Learn some more about how much a mortgage will cost you each week, and over the term of the loan by checking out this Mortgage Interest Rates Calculator.

Go to Home Finance