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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.

~October’s property newsletter

Published by Scott Miller on Friday, October 23, 2009 in

Interest rates

The Reserve Bank cash rate has remained at 2.5% for some time now. The next OCR announcement is set for 29th October 2009 and the expectation from the mainstream bank’s chief economist is there will be no change. However there is underlying pressures for the OCR to go up, and it is widely picked that the original comments from Dr Bollard that the OCR will remain unchanged until late 2010 is being overly optimistic. Just last week Nick Tuffley from ASB predicted that we will see a .5% increase in the OCR in March next year.

What would I do if I was looking to fix a loan?

I still believe there is merit in leaving your loan on the floating rate as we are some way off seeing the OCR rise. I also believe that long term interest rates (3 – 5 years) are no longer attractive as they are now higher than their 10 year averages. If you did want to fix your home loan I would suggest a maximum of 2 years and would consider the option of splitting your loan to reduce your exposure at the end of your next refix period. I offer free advice on fixing home loans and are happy to help you with your decision making. Please contact me here if you would like me to access your options.

Housing Market update

House prices continue to improve with September being the fourth straight month of property price increases. It is believed this is largely due to there being a high demand for property coupled with reasonable low levels of supply. A unseasonably warm end to winter also saw long periods of warm weather enhancing the warm fuzzy feeling around property procurement. This however has been tempered slightly by less than average weather for spring.

As is typical with property lead recoveries it is the major metropolitan centres that are experiencing the best capital growth.

This was evident in the resent QV report out on October 10th.

Lastly I would like to comment on population growth within New Zealand.

Population fluctuations are a well known contributor to the direction of house prices. We have seen a dramatic increase in the numbers of New Zealander’s returning to our shores and it will slowly filter through to the numbers of people either looking to rent or purchase a house. To give you an idea of immigration numbers 17,043 people have registered as permanent or long term returners to New Zealander to September 2009. This is a huge number and there is no sign of it slowing down.

Tip of the month

Be sure of the consequences of your decisions before re-fixing your home loan as it will play a large part in how things will unfold at your next loan roll over. Try and avoid getting advice from someone that works at the bank. Generally these people hold multi-roles that demand they do more than one job and are not specialists in mortgage lending.

As always please feel free to contact me for free independent advice on all things property.

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