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Mortgage Advice Blog

Get the latest news and tips about mortgage finance and the property market. Scott Miller, mortgage broker from Advanced Mortgage Solutions comments on housing and lending.

Mortgage Broker Christchurch - Property Gazette July

Published by Scott Miller on Tuesday, July 03, 2012 in


Current Interest Rates as at 02 July 2012
Variable 5.50%
6 Month Fixed 5.25%
1 Year Fixed 4.99%
2 Year Fixed 5.35%
3 Year Fixed 5.60%
5 Year Fixed 5.99%

Interest Rate Outlook

Activity in the property market continues to show positive signs of improvement, particularly in Auckland and Christchurch. However, there are some mixed signals that continue to permeate across the market. Client debt serviceability and a net migration outflow is keeping strong growth across New Zealand at bay.

Low interest rates remain the key stimulating factor, though consumers are still moving cautiously with many still focusing on reducing their debt while interest rates are low. Aggressive competition amongst banks for business is allowing us to negotiate substantial interest rate discounts for our clients.

The New Zealand economy remains caught between positive factors such as low interest rates, the Auckland housing market, and Christchurch’s earthquake rebuild versus headwinds from a volatile and worrying global scene. This alongside a weak national balance sheet is providing mixed economic signals. Meanwhile as the unemployment rate continues to drift down over the coming year we should see an improving and evolving labour market, helping households to remain focused on rebuilding their savings buffer.

Fixed mortgage rates edged lower this month, with floating rates at levels not seen for 50 years. The 1 year rate is still the cheapest, and all fixed rates up to 3 years remain at, or below the floating rate. Given these considerations, we see merit in fixing; anywhere from 1 – 3 years.

What’s Hot

There is currently quite a disparity between banks and their individual credit appetites; we are seeing regular examples of one bank declining a client with the next bank happy to write the loan. Often this is driven by the weighted Loan to Value Ratio in a bank’s portfolio, as such your clients are best to talk to us as “No” does not always mean “No” - Refer to us!

Deal of the Month

Last month we had a self-employed borrower who had recently signed a large contract, significantly boosting their income going forward, with the re-emergence of Lo Doc lending we were able to help fund this guy into a new house which he had been told was not possible – he was delighted when we got him sorted (Not to mention the Referring agent) - Call us we deliver!

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