If you are taking out a new mortgage or refixing and are getting set to jump on the cheapest interest rate you can find, stop.
Experts are warning that if you want to cut the amount of interest you pay over the life of your mortgage, sometimes you will have to ignore the specials in the market and start thinking more strategically.
Broker Ian Webb said banks would always heavily promote their lowest available rate, which was sometimes a loss-leader special where the bank was losing money to get customers in the door. "Notice they never promote a whole range of rates. The banks are driving customers to the part of the yield curve that benefits the bank, never the client."
He said the way interest rates were priced meant that people tended to gravitate towards shorter terms at times when the market was heading towards interest rate increases, while rates were cheaper on longer terms when rates were due to fall.
READ MORE: Using savings accounts for everyday banking is an expensive error
from
http://www.stuff.co.nz/business/81391682/Cheapest-interest-rates-not-always-the-best-option-experts-warn
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