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Cairns Lockie Mortgage Commentary – March 10

Issue 2000/4 10 March 2000

Welcome to the forth issue of the Cairns Lockie Mortgage Commentary for 2000. This is a fortnightly electronic newsletter which aims to keep you informed on developments at Cairns Lockie, Mortgage Bankers and the mortgage market in general. Previous issues of this commentary can be found on our website http://www.emortgage.co.nz

The Money Market

This morning (8.00 am on 10 March) the money markets were at the following levels:

Official cash rate 5.25%
90 day bill rate 6.27
1 year swap rate 7.00
3 year swap rate 7.72
10 year bond rate 7.20
Kiwi dollar 0.4905

Housing Confidence Dips

According to a recent survey by ASB Bank, confidence in the housing market has weakened over the past three months. In the same survey in October last year, 55% of respondence said it was a good time to purchase a property. In January of this year the figure was down to 38%. These figures are confirmed in recent house price turnover figures released by the Real Estate Institute. In January, house sales were down by 19% on the previous month. December's figures were down 24% on the same time in the previous year.

Why is this occurring, especially when we are hearing good news on the economy, with unemployment expected to dip below 6.0% for the first time in three years, growth estimated to be running around 3%, and a relaxing of the immigration rules? Interest rates have been partly to blame, but there is some positive news here. Cairns Lockie and most of the banks have recently decreased their five-year fixed mortgage rates over the past few weeks.



Priority Amounts on Our Mortgages

On a technical note, a few of our clients have queried the priority amount on our mortgages. We are currently setting our amount at 300%, whereas a number of other financial institutions are setting their priority at 150%. The reason is straightforward, a large number of our borrowers are coming back to us for further drawdowns. If we have a higher priority, we can accommodate these changes without our clients having to go to their solicitors each time to change the priority amount. Thus we can advance the funds quickly without our clients having to incur additional legal fees.

The Banks are at it Again Every time a bank closes more branches or increases its fees there is excitement in the press. This time it has been caused by the Westpac. On 1 May, they are introducing a number of new over-the-counter fees. This is further reason, why if you are thinking of refinancing, you should consider an alternative to your trading bank. At Cairns Lockie we do not charge any fees, once your mortgage has been established. We do not charge drawdown, monthly or annual fees. If you require, for eexample, an additional statement, there is no charge. We look forward to doing business with you.

Birthday Suit Mortgages

The NZ Herald reported this week that British tycoon Sir Richard Branson, bared it all for a new television advertisement. The spot, for Virgin all-in-one mortgage bank accounts, showed Branson removing his clothes, running bare-bottomed into the chilly English Channel, before re-emerging. No similar television campaigns are planned for Cairns Lockie this year.

Our current interest rates are as follows

Variable rate 7.15%
Two-year fixed rate 8.65
Three-year fixed rate 8.75
Five-year fixed rate 9.05
Line of credit facility 7.50

Regards
William Cairns
James Lockie

Cairns Lockie Limited PO Box 74-212, Market Road, Auckland Telephone (09) 525 9711 Facsimile (09) 579 7795

Website http://www.emortgage.co.nz
Email mailto:wcairns@emortgage.co.nz
mailto:jlockie@emortgage.co.nz
mailto:gslade@emortgage.co.nz
mailto:sgasson@emortgage.co.nz
mailto:pblain@emortgage.co.nz

If you know anyone who may find this newsletter useful we would be happy for you to forward it on.


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