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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 Brokers Christchurch - Property Gazette August

Published by Scott Miller on Friday, August 02, 2013 in

Where has winter gone?

With only one month to spring it's hard to believe we had a winter at all.

The pressure by the Reserve Bank continues to have its effect on New Zealand lenders, but as you will read below - don't believe everything you hear. Last minute submissions from the lender may have some impact on the Reserve Banks final decision, but we will not know the full outcome until September/October.

As you will read below, it has never been a better time to fix your mortgage.

Please contact me NOW to see what I can secure for you.

So on with what’s happened this month.                   

                                     Current Interest Rates as at 02 August 2013  
                                              Variable                       5.59%  
                                              6 Month Fixed             4.99%
                                             1 Year Fixed                4.95%
                                             2 Year Fixed                5.25%
                                             3 Year Fixed                5.65%
                                             5 Year Fixed                5.99%

Interest Rate Outlook

Read all about it! One of our pet hates is the half-witted way the New Zealand media report the goings on in areas they have little knowledge of or don’t pay enough time investigating. By the media’s reporting it is now impossible to borrow 95% of the purchase price of a house in New Zealand. This is factually incorrect, although it is a lot harder there is still lending available up to 95% albeit on a case by case basis as opposed to it being freely available to everyone who qualifies.

Yes, banks in New Zealand are tightening their appetite on the back of some fairly stern discussions with the Reserve Bank of New Zealand, so we are seeing these types of loans being harder to approve, however there are still a very good number getting through. In our opinion they will not be legislated out of the market altogether but for a time banks may be a little choosier as to whom they will lend 95% to.  

Building consents and house sales dropped in July. We put this more down to our traditional mid-year weather than an actual change in the market place. House prices remain on a strong upward curve, this is mainly due to the lack of stock which is all moving quickly, resulting in the average days to sell a house at a low of 33.

As reported last month, continued upward pressure remains on longer term fixed rates which have steadily been rising over the past 2 months (it is a pity the business media in NZ don’t have their eyes open to this fact to warn consumers who are blissfully unaware of these movements while they sit on their variable rate that has not moved).

As such when these consumers go to move onto fixed they will find out fixed rates moved some months back and they have missed the boat. Interest rates are only going to continue to trend upward in the foreseeable future, as such your clients should be talking to us NOW about structuring their debt the correct way to minimise rate rises, with the sweet spot looking to be around 2 - 3 years currently.

What’s Hot

In typical fashion the media is busy reporting half a story and scaring every potential first home buyer in NZ into rushing out to buy while you can still get up to 95% borrowing. Although not true please do keep in mind that lending criteria is becoming harder so please contact us if you are thinking of purchasing.

Deal of the Month

Not every self-employed client has their financials up to date and ready for borrowing funds, last month we had a self-employed guy with a good business which had increased and wasn’t reflected in financials, we got him sorted at a good consumer rate - Call us we deliver!

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