Blog

      Firstly I would like to apologise for this month’s Property Gazette coming to you a little later than normal. There has been a lot going on this month with the United States being down grade to a AA+ credit rating, a lot of talk around the pressures on the Official Cash Rate, and the New Zealand Mortgage Broker Association’s annual conference being held on the 4^th and 5^th of August.

So what has been happening this month?

Current Interest Rates as at 1 August 2011 
 
Variable                       5.75%  
6 Month Fixed            5.65%
1 Year Fixed                5.75%
2 Year Fixed                6.20%
3 Year Fixed                6.70%
5 Year Fixed                7.45%
 
Interest Rate Outlook
 
Should I stay or should I go now? If I go there could be trouble, if I stay there could be double....

But when?

Should you do it now or can you squeeze another month or two out at these basement rates of under 6%?

Personally I am of the opinion of that “it’s better to be safe than sorry”. It is almost impossible to pick the last day of the cheapest floating rate available, but if you look to fix shortly you are guaranteed to fix in a current fixed interest rate that is tipped to go up.

I am able to negotiation with lenders good margins off all fixed interest rates terms at the moment. This won’t last forever as the pressure on rates is to go up, so please consider contacting me when it is convenient.

 As the bank economists sat glued to their iPads, iPhones, Blackberries for Reserve Bank Governor Alan Bollard’s address on July 28th, most were left none the wiser as to whether now is the right time to lock in. Dr Bollard certainly has indicated that rates are going to rise this year, although exactly when nobody is sure.

You get the impression he would like to move now but is very concerned about the strength of our currency (or more so the weakness of the US, and now the credit rating drop) and this may be the sole factor in holding rates back to their current level. As such it doesn’t really put us in control of our own destiny when it comes to rates as we are reacting to events in the US & Europe as their debt crisis worsens.

My pick is he may not move in September but is more likely to do so on October 27th (the next OCR announcement) and the move could be as high as 0.50%. Be aware that as the demand for fixed rates increases, so may the price, and I would not be surprised to see fixed interest rates move higher before the variable rate moves.

My advice is to not be too greedy now as it may cost you in the future. It may be worth considering locking in part or all of your mortgage in the next month or so because, let’s face it, interest rates sub 7% locked away for a period of time is a good thing. 
 
What’s Hot

Fixing your interest rate! As many of our customers get nervous they are flocking from variable interest rates into fixed rates. Nobody knows when but at some stage this year rates are going to rise and often it is the fixed rates that move before the variable, so fixing now does make sense.

 
Deal of the Month

Getting by with a little help from Mum & Dad, last month we 100% funded a young couple into their first home, yes Mum & Dad acted as guarantors but they are only responsible for 20% of the value of the home & the young couple can comfortably afford the debt - Call us we deliver!