News - 12 September 2005

Interest Rate and Currency Comments

Incredible how one major event half a world away can impact the NZ economy so dramatically! Hurricane Katrina certainly had a devastating effect and the flow on in terms of oil prices and insurance premiums will be felt around the globe for months and years to come.

The Reserve Bank has its next review of the Official Cash Rate this Thursday. No change is expected, however talk will be tough, with higher oil prices and election spendups pushing inflation out to between 3.5% and 4% in the coming year. Counteracting that is a slowing domestic economy, which will slow even further as the impact of oil price rises begins to bite. Local interest rates are playing wait and see at this point.

Spring interest rate specials are popping up .... call me now to find out what has blossomed in your neighbourhood!

Lots of activity in the wholesale markets with several major bond issues launched means that the kiwi dollar will remain firm for some time to come. A stronger Aussie dollar has seen the cross rate drop back by a cent.

(See below for latest interest and exchange rates).

Food for Thought

Action may not always bring happiness, but there is no happiness without action. (Benjamin Disraeli)

Problem Profile

How to make your property purchase flow smoothly

Here are some tips to make your next property purchase, either home or investment, flow smoothly....

• DON'T settle on a Friday (everyone else does so banks and lawyers are extra busy)
• DO have a reasonable time for finance dates and settlement dates (suggested minimum 2 weeks. Short time frames means mistakes can get made because people are under pressure)
• DO consult with your lawyer and broker BEFORE signing an agreement (sale or purchase). Once signed, get the paperwork quickly to both broker and lawyer.
• DON'T have 2 brokers working on the same transaction (lenders get confused when they see the same request from 2 different sources and annoyed when their time is wasted)

For more Do's and Don'ts to make your next purchase or sale go smoothly, call Stuart Duncan at Alpha Financial Solutions Ltd and Acumen Mortgages on 0800 676 747 . We Can Help!

The Finance Markets

As of 8am on Monday 12 September 2005 the following Interest Rates applied:
Official cash rate 6.75% (stable)
90 day bill rate 7.05% (stable)
5 year bond rate 5.70% (down from 5.75%)
NZ/US Dollar 0.7053 (up from 0.6970)

Current Range of Interest Rates for home and investment mortgages as at 12 September 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% (stable)
3 Year - 7.45% to 8.40% (down slightly)
4 Year - 7.40% 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.