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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 Brokers Christchurch - February's Property Gazette

Published by Scott Miller on Wednesday, February 06, 2013 in
                  Current Interest Rates as at 5 February 2013

Variable                 5.55%
6 Month Fixed        5.10%
1 Year Fixed          4.95%
2 Year Fixed          5.35%
3 Year Fixed          5.65%
4 Year Fixed          5.99%
5 Year Fixed          5.99%

Interest Rate Outlook

The summer heat has been wonderful, not only for holidays but to help keep the fire lit under the property market. We have seen house sale numbers and building consents at their highest since 2008. Despite taking a bit of a breather over December and January we have still seen both house sales and prices increase year on year from 2011 to 2012 at circa 8% & 6% respectively. By the way 2013 has started this does not look like easing up any time soon.

Building consents are really starting to make an impact as the Christchurch rebuild has well & truly kicked in. The Auckland Super City Council are trying to free up more land to address the housing shortage, although word from developers in the region note the bureaucracy within the Super City council is enough to dampen the desires of even the most passionate developer!

Despite the strength of our housing market our overall economic growth in 2013 will still be heavily dependent on international markets such as Europe & the US. The problem here is these countries continue to grapple with the fallout of the GFC (Global Financial Crisis of the last 4 years) leaving us particularly dependent on Asia’s demand for our primary produce. Essentially 2013 is shaping up as more of the same as 2012, best defined as “grumpy growth”, although, growth, nonetheless.

What about interest rates?

There continues to be speculation that interest rates will rise (purely because they have never been this low), however our outlook has them stable for the majority of 2013 (well at least at this stage). Having said that there still appears to be more value in the 1 or 2 year fixed rates than the variable interest rate. As such fixing for 1 or 2 years appears to offer the most value currently, although for those of you with sizable debt there is a lot of common sense in splitting your debt across 2 or 3 fixed periods to diversify your interest rate risk.

What's Hot

The “sweet spot” for banks in terms of interest rates seems to currently be around the 2 year fixed rate. For clients with Loan to Value ratios of less than 80% we are currently seeing rates as low as 4.99% for 2 years being offered.

Deal of the Month

Christmas clearly saw some generous family conversations take place as in January we had 2 lots of clients whereby Mum & Dad provided guarantees for first home buyers, the good news is that now days these guarantees are only limited to 15% of the value no of the loan not 100% - Call us we deliver!

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