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Cairns Lockie Mortgage Commentary

Issue 2000/21 3 November 2000

Welcome to the twenty-first 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

The Money Market

This morning (8am on 3 November) the money markets were at the following levels:

Official cash rate 6.50% (unchanged from last fortnight)
90 day bill rate 6.65 (unchanged from 6.65)
1 year swap rate 6.84 (down from 6.96)
3 year swap rate 7.06
(down from 7.16) 10 year bond rate 6.64 (down from 6.70)
Kiwi dollar 0.3980 (up from 0.3945)

Website Update

Our website goes from strength to strength. Our hits last month increased by 20%. The most popular pages continued to be the mortgage calculators, competitor rate information, followed by our product information.

Our internet banking is fully operational. For those that have not used it, there is a demonstration module on our website. A number of users have commented that it is more comprehensive than the ASB Fastnet service. If you have any questions about it, please feel free to email or telephone us.

Loan Limits Increased

Throughout this year we have modified a number of our existing products and developed new ones. Two months ago we introduced our 95% product. This has enabled us to lend up to 95% of the purchase price of those wishing to purchase their new home. Many clients have taken advantage of this product, especially people returning from overseas. Often these clients return to well paid jobs in New Zealand, but have spent most of their savings while travelling. This is an ideal way to quickly purchase a new home.

We are aware there are some people on particularly good incomes that wish to purchase a substantial home. To cater for their needs we have increased our lending limits on loans, in the $300,000 to $500,000 range, from the current 85% of purchase price, to 90%.

What Banking Satisfaction?

The University of Auckland Business School, Marketing Department released its Banking Satisfaction Survey this week, causing bit of a stir in some quarters. The study revealed that customers are most unhappy about the fees and charges banks charge them. Fifty-nine percent (59%) of customers thought that the services they received from the banks were not worth the money they paid for them. Right from the beginning we have had a policy of not charging, monthly, semi annual or any other on-going fees.

The other interesting result was that 17% of residential customers are currently considering moving from their main bank (worse at the Westpac and ANZ with 29% and 20% respectively). With more non-bank mortgage lenders, such as Cairns Lockie, in the market, customers now have a real choice.

What is Really Happening in the Economy?

We are observing a number of conflicting views on the economy, not only amongst those we regularly talk with, but it also appears the economists cannot agree as well. Some are bearish, believing, in the short term, we are likely to see, higher than normal inflation and slower growth. Others are more positive, suggesting that the lower dollar will lead to stronger exports and greater economic growth.

At the coal face, we are starting to see an increase in mortgage enquiries and a slight improvement in economic confidence. Yesterday's announcement of lower than expected unemployment figures helps to confirm this.

Our current mortgage interest rates are as follows

Variable rate 8.25%

One-year fixed rate 8.10
Two-year fixed rate 8.10 (down)
Three-year fixed rate 8.20 (down)
Five-year fixed rate 8.35

Line of credit facility 8.60

Regards William Cairns James Lockie

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

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