Cairns Lockie Mortgage Commentary

Fri, 12 Nov 2004

Cairns Lockie Mortgage Commentary

Issue 2004/21 12 November 2004

Welcome to the twenty-first 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 http://www.emortgage.co.nz/newsletters.htm

The Money Market

This morning (8am on 12 Nov 2004) the money markets were at the following levels:

Official cash rate 6.50% (unchanged) 90 day bill rate 6.74 (up from 6.72) 1 year swap rate 6.74 (up from 6.70) 3 year swap rate 6.62 (up from 6.58) 10 year bond rate 6.12 (up from 6.06) Kiwi dollar 0.6875 (down from 0.6878)

General Finance Becomes a Deposit Taker

General Finance Limited, a fully owned subsidiary of Cairns Lockie, is issuing a Prospectus. This will enable us to raise retail funds from the public. Currently we are funded by a number of wholesale mortgage providers. In order to diversify our funding base we are now seeking retail deposits. This will enable us to further increase the number of lending products we have, and by having our own balance sheet, will increase our flexibility. Our retail investors will be secured by first ranking debenture stock and the proceeds of these funds will secured against property. Interest rates will be competitive. For those requiring more information please do not hesitate to contact us. Our investment statement and prospectus will be available from next week. We welcome your enquiries.

Our Mortgages Continue to Offer Maximum Flexibility

With mortgage rates having gone up several times this year, many borrowers are focusing just on interest rates. There is a lot more to a relationship than price alone. A good home loan must be able to offer full come and go facilities. This means that when a borrower receives a bonus or makes an additional payment, then this can be offset against their outstanding balance - thereby reducing the term or monthly payments. Similarly if you are paying your home loan off at a quicker rate and you require some additional funds, then you want to be able to access a redraw facility. The ability to fix without cost, and interest-only options are taken - but do check. A mortgage from Cairns Lockie does offer you all these sensible benefits and advantages.

Cannot Find that Rental Property?

If you cannot find a rental property with an acceptable price, design or condition - why no build your own. Often investors already own a property on a section that can be subdivided and an additional dwelling can be built. This can have a lot of advantages - you already know the likely rental demand of the particular area, you can enhance your yield when building as you are taking the developers margin, and more importantly you are able to construct a dwelling that is new and modern which is likely to attract a higher quality of tenant. Finally, with lenders such as ourselves developing more user-friendly construction mortgages it is easier to obtain finance. We look forward to assisting you.

Changing of our Coins

The Reserve Bank is looking at reviewing our coins by making the 10, 20 and 50 cent coins smaller and may be removing the 5 cent coin altogether. The dollar denomination coins will remain unchanged. We are surprised that the $5 dollar note is not being replaced with a coin. Back in 1967, with decimal currency, a 50 cent coin was introduced. The 50 cent back in 1967 is worth about $8 today, so our $5 dollar note could easily be replaced with a coin.

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 7.70

One-year fixed rate 7.91 Two-year fixed rate 7.87 Three-year fixed rate 7.84 Five-year fixed rate 7.86

Line of credit facility 8.25

ENDS

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