Cairns Lockie Mortgage Commentary #7 2001

Cairns Lockie Mortgage Commentary

Issue 2001/7 27 April 2001

Welcome to the seventh Cairns Lockie Mortgage Commentary for 2001. 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/newsletters.htm

The Money Market

This morning (10am on 27 April 2001) the money markets were at the following levels:

Official cash rate 6.00% (down from 6.25) 90 day bill rate 5.80 (down from 6.00) 1 year swap rate 5.70 (down from 5.74) 3 year swap rate 6.31 (up from 6.27) 10 year bond rate 6.45 (up from 6.23) Kiwi dollar 0.4130 (up from 0.4050)

Interest Rates on the Move

Last week the Reserve Bank decreased the Official Cash Rate by 25 basis points to 6.0%. This remains a full 1.0% above the cash rate in Australia, which is currently 5.0%. The Reserve Bank will review the OCR again in late May. The majority of economic commentators believe there will be a further decrease, citing the slowing down of world economies and the easing of inflationary pressures within New Zealand. Mortgage borrowers will see further downward pressure in the floating or variable rate. Earlier this year the downward pressure was in the medium part of the curve (2 - 5 years) Over the next few months the pressure will be on the very short end of the curve, i.e. at the 90 day range. Since the Reserve Bank announcement we have decreased our floating rate to 7.75% and if the current yield curve is a good predictor, we shall see further rate decreases shortly.

Landbroking is Establishing Itself in New Zealand

What is landbroking? Landbrokers are a group of suitably qualified people, who can carry out conveyancing. They are not solicitors and are, in fact, competing directly with solicitors. To date there are five landbrokers in this country, who have all qualified in Australia. In the future when buying, selling or refinancing a property, the advent of landbrokers will give the consumer another choice: you can go to either your solicitor or a landbroker.

Cairns Lockie will be Taking Deposits

As outlined in our previous newsletter, we have recently established a nominee lending company. We will be commencing lending from this company within a fortnight. We are now taking cash contributions from those interested in investing in mortgages. The way it works, is when a suitable mortgage is available, potential contributors will deposit their funds with us. The funds will sit in our at-call account until the mortgage is drawndown. We have access to some very favourable at-call rates. Our minimum investment is likely to be $10,000. The current at-call rate is around 5.2%. We believe this is a particularly attractive in the current market. We will keep you informed of our developments.

Increasing Our Operations Resources

As we are continuing to expand, we have increased our staff resourcing in our operations area. We are pleased to have appointed Scott Gasson to Operations. Scott was previously in our lending team so he knows our business well. Scott has had previous sales and operations roles with Sovereign Insurance, AMP Bank and ANZ. Any of our clients or introducers who have any administration or operations queries, please do not hesitate to contact him. Scott's existing sales contacts will be look after by Glyn Slade and Paul Lange. We wish Scott all the best in his new role. We are currently looking to expand our lending staff and would be interested to hear from those with an interest in this area.

Our current mortgage interest rates are as follows

Variable rate 7.75% (new)

Quick Start Home Loan 6.79 One-year fixed rate 7.20 Two-year fixed rate 7.15 Three-year fixed rate 7.40 (new) Five-year fixed rate 7.50 (new)

Line of credit facility 8.10 (new)

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:plange@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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