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Cairns Lockie Mortgage Commentary 30 Sept

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  • Cairns Lockie Mortgage Commentary 30 Sept

    Hi Guys

    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
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx