Cairns Lockie Mortgage Commentary
Cairns Lockie Mortgage Commentary
Issue 2003/9 30 May 2003
Welcome to the ninth Cairns Lockie Mortgage Commentary for 2003. 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 (8am on 30 May 2003) the money markets were at the following levels:
Official cash rate 5.50%
90 day bill rate 5.27 (down from 5.45)
1 year swap rate 5.04 (down from 5.17)
3 year swap rate 5.32 (down from 5.50)
10 year bond rate 5.38 (down from 5.60)
Kiwi dollar 0.5775 (up from 0.5735)
90 Day Rate Below the OCR - Unusual
We are currently in the unusual situation where the 90-day bill rate at 5.35% is below the Official Cash Rate of 5.50%.
This happens only very occasionally, and indicates that the market is expecting a cut in the Official Cash Rate when it is reviewed next week (June 5th Monetary Policy Statement).
The market is still divided as to whether the decrease will be a quarter or a half a percent. The main reasons cited by the commentators for decreasing our interest rates, are a slowing in business growth and confidence.
The effect on mortgage rates will be immediate with floating mortgage rates decreasing by the amount of the cash rate reduction.
Fixed rates will remain about the same.
Due to the continuing strong property market we are asked two recurring questions - "Can I buy a property and let it as I am about to go overseas?" and "I am currently living overseas but will be returning to New Zealand in a year or so, can I buy a property now?"
We can answer "Yes" to both these questions.
In fact we treat mortgage applicants in these two situations in exactly the same way as we treat anyone else. Our website at http://www.emortgage.co.nz is an efficient and inexpensive way for overseas based people to communicate with us.
We can in fact offer our borrowers more in these situations, such as advice on likely rental property managers, lawyers and how to structure your transactions. Send us an email.
When you are looking at a property it is always interesting to know the capital or rating value. This information is increasingly becoming available on council websites.
The Auckland, Wellington and Christchurch City Councils have good websites where this information can be found.
Some including the Hutt Valley include aerial photographs For Auckland go to http://www.aucklandcity.govt.nz/council/services/ridonline/default.asp
For Wellington go to http://www.wcc.govt.nz/services/rates/search.html
For Christchurch go to http://ratesinfo.ccc.govt.nz/
For Tauranga go to http://kiosk.tauranga.govt.nz/
For Hutt Valley go to http://gis.huttcity.govt.nz/maps/PropertyEnquirySystem/presentation/compass/ search.asp
Our 100% Home Loan Popular
We are pleased to say we are assisting a number of people into their first homes, who for a variety of reasons are unable to save the required deposit. We provide a 90% first mortgage and arrange a second mortgage for the balance. The second mortgage is structured so it can be repaid quickly without incurring penalty charges.
The first mortgage portion is at a fixed rate for the first 12 months making the borrowers outgoings certain during their first year. This type of mortgage is available to those purchasing their first home (owner occupied or rental investment). Most are owner occupied.
New immigrants, particularly from South Africa, have been benefiting from this product. This loan does not suit borrowers who have more than $3,000 of outside debt.
Our current mortgage interest rates are as follows
Variable rate 7.25%
No Financials Home Loan 8.25
Jumbo Loan 7.25
Quick Start Home Loan 6.05 (new)
One-year fixed rate 6.36 (new)
Two-year fixed rate 6.52 (new)
Three-year fixed rate 6.74 (new)
Five-year fixed rate 6.91 (new)
Line of credit