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Cairns Lockie Mortgage Commentary

Cairns Lockie Mortgage Commentary

Issue 2006 / 4 24 March 2006

Welcome to the fourth Cairns Lockie Mortgage Commentary for 2006. 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 24 March 2006) the money markets were at the following levels:

Official cash rate 7.25% (unchanged)
90 day bill rate 7.46 (down from 7.56)
1 year swap rate 7.25 (down from 7.35)
3 year swap rate 6.65 (down from 6.80)
10 year bond rate 5.77 (up from 5.74)
Kiwi dollar 0.6250 (down from 0.6500)

Licensed Conveyancers are Now Okay

Recently in Parliament, the Lawyers and Coveyancing Act was passed into law, creating the new profession of "Licensed Coveyancer". Now, if you are buying or selling a house you have a choice of either using a licensed conveyancer or a lawyer. This may, over time, reduce property transaction costs. Built into the legislation is a range of consumer protections such as requiring licensed conveyancers to have professional indemnity insurance. Licensed conveyancers exist in other jurisdictions.

Increase Council Rates Hurt the Elderly

Over the past 5 years, the inflation rate has averaged between 2 - 3%, and for the next couple of years it is expected to average around 3%. Across the country councils have been increasing their rates by 7 -10%. Regional councils are doing the same. Ongoing rate increases, such as we are experiencing, hurt two particular groups in society, the elderly on fixed incomes and those juggling the many costs of bringing up a family. Councils must look at new and innovative funding alternatives and live within their means rather than having a cost-plus mentality. Most of the regional council activities should be devolved back to the local councils and their role should be no more than that of an environmental protection agency. This would stop the current trend of empire building within these organisations and reduce rate rises.

Good News for the Self Employed

One group who has traditionally found it harder to borrow is the self employed, who run small to medium sized businesses. Over the years we have targeted this particular market segment and have developed a range of products which meet their individual requirements. Our "No Financials or Low Doc" mortgage is ideal here. In many cases the self employed can borrow at our prime rates. All they have to do is self-certify their incomes. This saves a lot of time, not to mention the cost of producing financial accounts and cash flows. We welcome your enquires.

Invest With Us and Increase Your Returns

Our subsidiary company, General Finance Limited is offering 9.99% pa with interest paid quarterly for a two year secured debenture investment. This is an attractive return but you can do still better with us. If you do not require your interest paid out quarterly as income, you can select our reinvestment option. This way you get paid interest on your interest (also known as compound interest). This will increase your first year return on the above investment from 9.99% to 10.37%. Our secured debenture investments are an attractive way to save.

Our current mortgage interest rates are as follows:

Variable rate 9.20%

No Financials Home Loan 9.80

Jumbo Loan 9.20

Quick Start Home Loan 8.10

One-year fixed rate 8.53
Two-year fixed rate 8.04
Three-year fixed rate 7.89
Five-year fixed rate 7.89

Line of credit facility 9.30

William Cairns
James Lockie

Cairns Lockie Limited
321 Great South Road, Greenlane, Auckland
PO Box 74-212, Market Road, Auckland
Telephone (09) 526 2000
Facsimile (09) 579 7795
Email (ddi 09 526 7801) (ddi 09 526 7800) (ddi 09 526 7802) (ddi 09 526 7805) (ddi 09 526 7811) (ddi 09 526 7816) (ddi 09 526 7803) (ddi 09 526 7812) (ddi 09 526 7819) (ddi 09 526 7806) (ddi 09 526 7804) (ddi 09 526 7814) (ddi 09 526 7808) (ddi 09 526 7809) (ddi 09 526 7809) (ddi 09 526 7815) (ddi 09 526 7813)

If you know anyone who may find this newsletter useful we would be happy for you to forward it on.

Cairns Lockie Limited is not a Registered Bank.


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