Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Cairns Lockie Mortgage Commentary - 17 Sept 2004

Fri, 17 Sep 2004

Cairns Lockie Mortgage Commentary

Issue 2004/17 17 Sept 2004

Welcome to the seventeenth Cairns Lockie Mortgage Commentary for 2004. 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 17 Sept 2004) the money markets were at the following levels:

Official cash rate 6.25% (up from 6.00) 90 day bill rate 6.68 (up from 6.55) 1 year swap rate 6.75 (up from 6.66) 3 year swap rate 6.69 (up from 6.68) 10 year bond rate 6.16 (down from 6.20) Kiwi dollar 0.6586 (up from 0.6456)

Cairns Lockie Expands Product Range With Another Wholesale Funder

Cairns Lockie Limited is termed a non-bank lender as we rely on wholesale providers for our funding. Twenty years ago a company such as ours would have operated exactly like a Building Society, relying on retail deposits. Today we use wholesale funders to give us access to the depth of funding that only the wholesale market can provide.

Our main
wholesale funder, to date, has been AMS (NZ) Limited an Australian wholesale funder. From this week we have an additional funder, Origin (NZ) Limited, a wholly owned subsidiary of the ANZ Bank. We welcome our additional funder as it will enable us to add several new mortgage products to our current range. It is our aim at Cairns Lockie to have one of the most extensive ranges of residential mortgage offerings in the market. We are nearly there and have some more developments coming.

What is New

With an additional wholesale funder on board, our product offering has increased and this will be revealed over the next few weeks. Here are three: " Our maximum exposure on a single dwelling was $750,000. We have now increased this to $2,000,000 (or beyond depending on the transaction). The borrower still has to show they can service that amount. " Increasing our exposure to individual borrowers over several properties from around $1.0 -1.5 million to around $3.0 -3.5 million. This is important as it enables us to advance more funds to a number of our existing clients. " Greater latitude to lend on a number of residential properties including lifestyle blocks and inner city apartments. We welcome your enquiries.

First Home Buyers Have It Tough

One of the unseen consequences of mortgage increases is that it is making harder for first home buyers, particularly those with a single income. Six months ago, a first home buyer was able to borrow at around 7.0%, but now the rate has increased to 8.5%. On a $200,000 mortgage for a 25 year term, repayments will have increased around $200 per month. At the same time houses over the past six months have not dropped in value, they have actually increased, even in a higher interest rate environment.

The Governor of the Reserve Bank, in his move to slow the economy, is actually hurting a group that wants to purchase an owner occupied property. This group is not speculating on rental property, they are not into excessive personal consumption as they are actually saving their deposit, they are an unseen group, being hurt by rising mortgage rates and house prices.

Depreciation Rules May Change

One of the tax advantages of owning residential rental properties is that you can make tax deductible allowances for depreciation. Some are arguing that given properties seldom drop in value, giving an allowance for depreciation does not make a lot of sense. The rates applicable for chattel depreciation for rental properties is similarly under review.

There is an opportunity for the public to have their say. We suggest that concerned property investors make a submission to the Inland Revenue. Submissions close on 30 September 2004. Depreciation is an important issue with property investors. If a hard line is taken it may reduce the numbers willing to invest in this area and may prevent some landlords carrying out improvements, particularly to kitchen and bathrooms which do depreciate over time.

Our current mortgage interest rates are as follows

Variable rate 8.15%

No Financials Home Loan 9.15

Jumbo Loan 8.15

Quick Start Home Loan 7.65

One-year fixed rate 7.96 Two-year fixed rate 7.87 Three-year fixed rate 7.94 Five-year fixed rate 7.96

Line of credit facility 8.25

Regards William Cairns James Lockie


© Scoop Media

Business Headlines | Sci-Tech Headlines


Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>


Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news