News - 29 AUGUST 2005

Interest Rate and Currency Comments

No changes of any significance to headline rates in recent weeks. Petrol price increases and election promises are boosting inflation, whilst a slowing economy is reducing inflation – net result is that the status quo will remain for some time to come. Interest rate reductions for short-term rates are getting further and further away, however spring is around the corner. Lenders traditionally introduce specials in spring, to boost activity at a time where market activity normally rises.

The first special is already out and is available through brokers only at this stage. How Special? Call or email me to find out…

The kiwi dollar continues to trade in a range of about 2 cents either side of US70 cents. However fluctuations within this range are a bit like the score in the All Blacks vs. South Africa game on Saturday night – regular changes!!!

(See below for latest interest and exchange rates).

Food for Thought

Life is what is coming, not what it was!

Problem Profile

How to finance an investment apartment and a new home, when you're trading bank says “No”!

Some clients I have worked with recently were faced with this dilemma. They were contractually obliged to purchase the apartment, which they signed up for 2 years previously. A change of home came within the same month, and they did not yet have their financial accounts done (both were self-employed). Despite a good relationship with their trading bank, the bank found this request too hard. WHAT TO DO??

The solution was a “No Financials or Lo-doc Loan” through a non-bank lender. The couple had plenty of equity and, whilst they couldn’t prove an income sufficient to satisfy the Bank, they knew that they could make the payments comfortably. And the best part of all…? Interest rates on these types of products have reduced so that, in most cases, they are similar to standard bank rates!!

Who do you know who has a problem like this??? Get them to call Stuart Duncan at Alpha Financial Solutions Ltd and Acumen Mortgages on 0800 676 747 to find out more. We Can Help!

The Finance Markets

As of 8am on Monday 29 August 2005 the following Interest Rates applied:
Official cash rate 6.75% (stable)
90 day bill rate 7.03% (stable)
5 year bond rate 5.75% (down from 5.83%)
NZ/US Dollar 0.6970 (down from 0.7057)

Current Range of Interest Rates for home and investment mortgages as at 29 August 2005.

Floating:
7.85% to 9.50% (stable)

Fixed For:
1 Year - 7.60% to 8.40% (stable)
2 Year - 7.45% to 8.25% (up slightly)
3 Year - 7.45% to 8.40% (up slightly)
4 Year - 7.45% to 7.75% (down slightly)
5 Year - 7.40% to 8.00% (down 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.