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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.

Property Gazette - December

Published by Scott Miller on Tuesday, December 06, 2011 in

                        Welcome to December's edition of AMS's Property Gazette.

Well here we are at the end of another year, and what a year it has been. Earthquakes, mine explosions, rowing world champs, rugby world cup, shipwrecks, and a general election make up an extreme year of highs and lows.

On a personal note I would like to say thank you to all those who have helped and supported the Canterbury earthquake appeals, without your help many of us Cantabrians would be in a far worse position than we find ourselves.

On a brighter note New Zealand finds itself in the middle of a mini pricing war between the mainstream lenders which is bringing all sorts of goodies for us consumers – please feel free to contact me to find out how you can benefit.

So onto the economic news in New Zealand and around the world.

Current Interest Rates as at 5 December 2011

Variable                5.60%

6 Month Fixed        5.59%

1 Year Fixed           5.55%

2 Year Fixed           5.65%

3 Year Fixed           5.95%

5 Year Fixed           6.95%

 

Interest Rate Outlook

Don’t turn on the news if you want any light relief – even though we got through the election rather painlessly we are still subjected to painful scenes every night. Most of which come from overseas and it is not uncommon to see 3 or more clips of rioting or fighting amongst citizens of the same country.

The financial stress that the world economy is under adds fuel to simmering tensions that run through many countries and right now every day it appears that Europe gets worse, as economic instability spreads from Greece, though Italy, France and even on to the previous impregnable Germany. It is at times like this that the tyranny of distance can be our friend, although while we are removed from the violence we see, we are not removed from the economic pressure the bad debt crisis in Europe is generating.

Fortunately for us all, this pressure has currently resulted in an easing of long term fixed rates and for the first time in some months we saw a reduction of interest rates in the 2 & 3 year fixed periods. How long this will last or whether it will continue is too difficult to know, however it now sees Variable and Fixed Interest rates closer than they have been for some time.

As such, the question that is now common, is should I fix my rates now? There is no right or wrong answer to this question although with 2 year fixed rates now matching variable there is no longer a dollar cost in buying some stability. It is just some flexibility that clients will forgo by locking in now.

The question of will interest rates go even lower is also a hard one to answer, while we are at historic low rates there is no guarantee that if the above European issues worsen that we will not see further interest rate cuts across the world. Given there is so much uncertainty perhaps the best strategy could be splitting your loan into part variable and part fixed at a mid-term rate.    

What’s Hot

It is the season to be silly and the banks are obliging with some crazy deals in the market right now. We are seeing big interest rate discounts off already sharp rates and legal fee contributions exceeding $1,000.00 regularly, talk to us, you will be surprised what we can get from your bank.

Deal of the Month


We’ve seen it before, clients with a history of excellent credit and all of a sudden an event occurs in their life, it may the death of a loved one or business venture failed, all of a sudden their credit is shot – last month we helped a client in this position to secure a home - call us we deliver!

Contact us to get free personal mortgage and home loan advice








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