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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 - October

Published by Scott Miller on Monday, October 07, 2013 in

This month we are starting to see the impact of the Reserve Banks implementation of the 20% minimum deposit rules. You will probably be aware of ASB's decision to cancel all of the preapproved loans where the deposit was less than 20%. Fortunately no other lender has followed.

We will start to see the 'taps' turned on again in the low-deposit space in about 4-5 months as the existing preapprovals work their way through the system. There are of course alternatives - Please contact me on 0508 466 356 to discuss these options.

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 03 October 2013  

                                   Variable                 5.59%  
                                    6 Month Fixed       4.99%
                                     1 Year Fixed         4.95%
                                     2 Year Fixed         5.45%
                                     3 Year Fixed         5.99%
                                     5 Year Fixed         6.55%

* Please note the rates published above are for new under 80% lending only. Please contact me if you are looking to fix or rollover your existing lending.

Interest Rate Outlook

We have a third of the customers in the nightclub over indulging….. so the bouncers cut all drinks to all patrons…. That doesn’t make sense does it? Certainly not, especially for a mild mannered drinker like myself! I apply this analogy to the recent Reserve Bank rules limiting the amount of loans the banks in NZ can provide to clients who want to borrow more than 80% of the purchase price of a property.   

While the Auckland property market continues to be extremely buoyant, the rest of the NZ property market was shuffling along, (accepting that Christchurch has some earthquake related price issues).

As such the recent above moves do not make any sense for two thirds of the country, that said Mr Wheeler (Governor of the Reserve Bank of NZ) has shot his cannon so to speak and we all have to deal with the fallout (interesting to note the government are distancing themselves from the decision, stating that it is a Reserve Bank decision they have no jurisdiction over!).

The fallout is hurting Kiwis across the country as first home buyers are coming to the realisation that they now need to save a heck of a lot money as a deposit to get into a property or rely on accommodating parents who will act as guarantors for them. Over the weekend I added the following page to the Advanced Mortgage Solutions Website to help those wanting to purchase a property with less than a 20% deposit saved.

The pain is somewhat offset by the government sponsored Welcome Home Loan, which allows a 10% deposit of a purchase price, however it does come with a number of “caveats” around who can qualify, as such never more has the services of a quality Adviser (like us) been required, to provide guidance to clients through the current mortgage landscape.

The above change should see interest rates steady for the balance of 2013, however as mentioned last month, longer term fixed rate money has already shot up considerably, jumping up circa 0.75% over the past two months. Please do talk to us now; our advice has never been more important!

What’s Hot

The ability to borrow 85% of the purchase price of the property! There are currently 2 banks in NZ providing this product, although the criteria are tight! There is also one non-bank lender currently providing finance to 90% of the purchase price, they are “red hot” right now!     

Deal of the Month

Ahhh, the 2pm call from a desperate Real Estate agent. Can you help my client, finance expires at 4pm today and they have been declined….. ! Last month we saved a deal on the death knell for an agent due to our access to the above products – don’t wait - have your clients call us now!

I look forward to hearing from you with any questions you may have.

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