News - 12 November 2007

The Alpha Update

Renegotiating your mortgage

If you (or someone you know) are due to refinance your mortgage, the unfortunate truth is that interest rates are much higher than the interest rate you are currently paying. Before you start talking to the bank, trying to do your own interest rate negotiation, you need to talk first to a mortgage broker like Alpha Financial Solutions. Apart from negotiating a competitive rate on your behalf, there are many other clever ideas we have to save you money over the long term.

Are you able to change the frequency with which you are making mortgage payments? Have you considered splitting your mortgage into two or more portions so that your renewal dates are spread over time? What about lump sum repayments if you get a bonus from work?

We can calculate the impact of these potential changes to see if they are worthwhile and will save you money. As brokers, we talk with financial institutions daily, so we are well versed in what to ask and what strategies to take – negotiating is our business!

Curious about whether using a broker can help you get a better deal on your mortgage? Then give Stuart a call on 021 676 747 or 0800 676 747. We Can Help!

Food for Thought

All I ask is the chance to prove that money can't make me happy - Spike Milligan

What's New??

• Win a House! - Summer campaign from ASB Bank
• No doc loans at 70% LVR
• Lo doc loans at 85% LVR (first mortgage only)
• Lo doc loans at 90% LVR (first and second mortgage)

For more information about any of these opportunities, email Stuart@alphagroup.co.nz

Interest Rate and Currency Comments

Interest rates have risen across the board in the last week, by between 0.2% and 0.3% in most cases. This is a huge jump and caused by the rising cost of wholesale funds on expectation of further rises in the OCR and the cost of funds from offshore. An Example (from BNZ's newsletter): "wholesale fixed borrowing costs have risen strongly over the last week with the two year swap rate now around 8.83% compared with 8.71% last week and 8.57% a fortnight ago. Two months ago this rate was 8.24%." Expect further increases rather than decreases whilst economic growth remains strong.

The kiwi has been a mixed bag in the past fortnight, rising strongly against the US (as their dollar fell sharply), slowly gaining against the pound and euro, and falling against the aussie as their Reserve Bank increases interest rates. These core trends are likely to continue for some time yet.

(See below for latest interest and exchange rates).

The Finance Markets

As of 8am on Monday 12 November 2007 the following Interest Rates applied:
Official cash rate 8.25% (stable)
90 day bill rate 8.66% (up slightly)
5 year bond rate 6.98% (up)
NZ/US Dollar 0.77569 (down from 0.7619)

Current Range of Interest Rates for home and investment mortgages as at 12 November 2007.

Floating:
9.7 to 10.80% (stable)

Fixed For:
1 Year - 9.25% to 10.45% (up slightly)
2 Year - 8.99% to 9.85% (up)
3 Year - 8.90% to 10.05% (up)
4 Year - 8.85% to 9.72% (up)
5 Year - 8.70% to 9.68% (up slightly)

For a complete table of interest and exchange rates, click here.

The information stated herein was correct at the time of release, but is subject to changes without notice.