retirement.org.nz

“When mortgage interest rates drop, the temptation may be for new home buyers to purchase a more expensive home than they might otherwise.

“Likewise, people already with mortgages may be tempted to take advantage of a drop in their repayments to increase their discretionary spending in other areas.

“Our advice is to view the drop in mortgage lending rates as a great opportunity to improve your financial position by getting rid of your debt faster.

And remember, interest rates will rise at some point in the future, so your borrowing decisions should take that into account.”

Colin Blair suggests people use his Office’s online calculators to work out how much faster they could get rid of their debt if they take advantage of lower mortgage interest rates to speed up their repayments.

“The calculators will work out for you how much you can save in interest repayments, and how much sooner you can have your debt repaid.”

And the Commissioner’s advice about what to do when you’ve paid off your debt?

“Start saving the equivalent amount towards your retirement. The sooner you get rid of your debt and start saving,the better,” Mr Blair recommends.

The Office’s retirement planning calculators can be found at www.retirement.org.nz.  For those people without Internet access, the calculators are also available on CD Rom by calling 0800 45 65 85.

For further information:
Liz Read
Communications Manager
Office of the Retirement Commissioner
Tel: 04 499 7396

Attachment
Retirement Commissioner urges homeowners to take advantage of falling interest rates to get rid of their mortgage