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Cairns Lockie Mortgage Commentary

Issue 2004/18 30 Sept 2004

Welcome to the eighteenth Cairns Lockie Mortgage Commentary for 2004.
This is a fortnightly electronic newsletter, which aims to keep you
informed on developments at Cairns Lockie, Mortgage Bankers and the
mortgage market in general. Previous issues of this commentary can be
found on our website http://www.emortgage.co.nz/newsletters.htm

The Money Market

This evening (5pm on 30 Sept 2004) the money markets were at the
following levels:

Official cash rate 6.25% (unchanged)
90 day bill rate 6.22 (down from 6.6
1 year swap rate 6.83 (up from 6.75)
3 year swap rate 6.73 (up from 6.69)
10 year bond rate 6.12 (down from 6.16)
Kiwi dollar 0.6700 (up from 0.6586)

Quoted in the Press

In our last newsletter, we ran an article on "how first home buyers were
finding it tough" to purchase a home in this rising interest rate
environment. It is pleasing to see writers in the mainstream newspapers
such as David Killick in the Christchurch Press and Anne Gibson in the
NZ Herald providing sound commentary on this issue. Our company is
interested in assisting the first home buyer. Our 100% No Deposit Home
Loan is ideal here. While this does not solve the rising interest rate
issue, it does assist those on a reasonable income who cannot save up a
deposit. The important issue with this mortgage is that it gets people
on the first rung of the ladder.

Construction Loans

We are now able to provide construction loans, allowing borrowers to
finance the construction of their own home or that of a rental property.
Construction loans are often the most difficult type of loans to get
approved but if the right information and processes are followed they
are straight forward. Before applying to us it is important to have
*a block of land identified with the intention of building on it within
the next 12 months.
*a fixed price contract and a licensed builder carrying out the
All other terms and conditions remain the same as for an ordinary loan.
We can even help self-employed people with a No Financials Construction


As inner city apartments become more popular, more borrowers want to
raise mortgages against them. It is also seen as the part of the market,
rightly or wrongly, that is the most exposed to any property price
correction. Lenders are taking a cautious approach. Our current criteria
is that an apartment must be a minimum of 40 square metres and that we
will lend up to 90% of the lower of purchase price or valuation. We do
not mind whether the apartment is used for rental or is owner occupied.
Apartments are starting to become a feature in suburban areas and these
are generally contained in much smaller blocks. Lenders are not so
strict with these and you can often borrow up to 90%. We can lend up to
65% with our No Financials loans.

More Records in Wellington

Following our comments on multimillion dollar houses in Wellington four
weeks ago, a reader drew our attention to another one that is worthy of
comment. Recently a luxurious property was sold in "The Track" at
Plimmerton on the Kapiti Coast just north of Wellington for $2.4
million. This is a high price by Wellington standards, but the most
expensive property sold on the Kapiti Coast. The house was on 3.4
hectares, and was 620 square metres - five times bigger than the average
New Zealand home. It was only six years old, had sweeping sea views and
a five car garage.

Our current mortgage interest rates are as follows

Variable rate 8.15%

No Financials Home Loan 9.15

Jumbo Loan 8.15

Quick Start Home Loan 7.70

One-year fixed rate 8.01
Two-year fixed rate 7.97
Three-year fixed rate 7.94
Five-year fixed rate 7.96

Line of credit facility 8.25

William Cairns
James Lockie