Six tips for managing your mortgage

Reserve Bank Governor Allan Bollard refrained from moving interest rates this week, but economists predict those at the mercy of market forces can expect the return of hefty interest rates in coming years.

The Weekend Herald approached four financial experts for advice for those struggling with mortgages - or considering taking one on.

1) Allow for possible loss of income over the mortgage period.

Bernard Hickey of interest.co.nz reckons many families rely on two incomes, and buyers have to consider their ability to repay debt "if your wife accidentally falls pregnant". As most mortgages were taken for a term of at least one to 15 years, "if you have a two-income family, at some stage, someone in the family is not going to have a job".

2) Be prepared to divide your debt between floating and fixed.

Herald financial columnist and seminar presenter Mary Holm says people should consider splitting their mortgage payments up to three ways - floating, short-term fixed and long-term fixed. Such a move had the great advantage in that "you don't end up being hacked off" in the event mortgage rates change suddenly.

To read the full NZ Herald article click here

Posted: 12 Sep 2009

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