Cairns Lockie Mortgage Commentary

Cairns Lockie Mortgage Commentary

Issue 2000/15 11 August 2000

Welcome to the fifteenth issue of the Cairns Lockie Mortgage Commentary for 2000. 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 evening (5pm on 10 August) the money markets were at the following levels:

Official cash rate 6.50% (unchanged from last fortnight) 90 day bill rate 6.75 (down from 6.84) 1 year swap rate 7.12 (unchanged) 3 year swap rate 7.27 (down from 7.28) 10 year bond rate 6.65 (down from 6.70) Kiwi dollar 0.4520 (down from 0.4575)

Wholesale Rates in Australia and the USA

Our wholesale rates have been rising over the past year. Has this been occurring in other countries? And, how do our wholesale rates compare? In Australia and the United States wholesale rates have been increasing and their rates are similar to ours. The current rates are as follows (%)

NZ Australia United States

Cash 6.50 6.25 6.50 90 day bill rate 6.75 6.45 6.70 1 year swap 7.12 6.55 6.90 3 year swap 7.27 6.63 6.95 5 year swap 7.29 6.65 7.00

The next statement regarding the Official Cash Rate is due from Don Brash next week (Wednesday 16 August). Most commentators expect no change from the current level of 6.50%

Home Renovations

Cairns Lockie now appear on a popular home renovation and do-it-yourself website. This is a helpful site if your are interested in refurbishing or doing up your own home or a rental property. Check it out at http://www.diy-online.co.nz. They have a helpful (and free) email newsletter too. Subscribe at http://www.diy-online.co.nz/library/diy-news.htm

Increase Your Payments

Following interest in our article, 20 Ways to Save Money on Your Mortgage (http://www.emortgage.co.nz/save.htm), a number of customers have asked how much they will save by increasing their regular mortgage payments. To answer this question we have added another calculator to our website. This calculator shows the reduction in your mortgage term and the interest savings available. If for example, you have a mortgage of $200,000 at 8.35% for 25 years, your monthly payments, on a principal and interest basis, will be $1,590.29. If you can increase your payments by as little as an extra $50 per month, you will reduce your term to 22 years and 8 months and save a total of $30,789.83 in interest. Check out this new calculator at http://www.emortgage.co.nz/calculator.htm#save.

Our Population is Still Growing

We hear a lot in the media about people leaving this country, but according to the Statistics Department the estimated population for New Zealand is 3,831,000. This is 20,300 or 0.5% above last year. Half the population is now aged over 34.3 years, which is an increase of nearly 3 years from the median age of 31.4 years in 1990. Those, in the under 15 year old age group, have decreased, whereas the number of senior citizens over the age of 65, have increased.

Our current interest rates are as follows

Variable rate 8.35%

One-year fixed rate 8.25 Two-year fixed rate 8.35 Three-year fixed rate 8.38 Five-year fixed rate 8.45

Line of credit facility 8.70

Regards William Cairns James Lockie

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