News - 26 May 2008

The Alpha Update

Thinking Outside The Box

In the current environment of tight credit standards and fewer finance company and second tier lenders, creativity is the key to getting transactions settled.

I have recently helped a client who would have typically raised funds from a finance company. Instead, we have used a non-conforming lender, but restructured some of his existing debt along the way so as to make the cost more acceptable. Most lenders will happily swap security from one property to another of similar value. Thus we have turned a series of short term needs from the client into a long term loan for the lender.

Who do you know that needs this sort of creativity from their finance professional?? Get them to call Us Today on 021 676 747 or 0800 676 747. We Can Help!!

Food for Thought

When wealth is lost, nothing is lost. When health is lost, something is lost. When character is lost, all is lost! Billy Graham

What's New??

• More interest rate reductions

• A further reduction in lo-doc lending limits from ANZ and National Bank

If you or anyone you know wants to know more about any of these products, email Stuart@alphagroup.co.nz

Interest Rate and Currency Comments

The markets anticipated a spend-up in the budget, but not this big! Interest rate reductions are likely to be pushed out by 3 months or more because of the inflationary effects of the budget tax cuts. However the BNZ is still expecting 2 year rates of around 8% by year end, because of the slow down in the economy. Clearly consumer spending is being hit from all sides, and the tax cuts will have little impact on this. As long as unemployment doesn't rise too much, lower house prices and interest rate reductions will kick start things again next year.

With signs that our interest rates will stay higher for longer, the kiwi bounced higher after the budget. However, the fundamentals of our economy still indicate a fall in the exchange rate - it's just the when and by how much that remains uncertain. The cross rate with the aussie will continue to deteriorate as their economy remains stronger than ours.

(See below for latest interest and exchange rates).

The Finance Markets

As of 8am on Monday 26 May 2008 the following Interest Rates applied:
Official cash rate 8.25% (stable)
90 day bill rate 8.69% (up)
5 year swap rate 7.71% (up)
NZ/US Dollar 0.7870 (up)

Current Range of Interest Rates for home and investment mortgages as at 26 May 2008

Floating:
9.80 to 11.50% (stable)

Fixed For:
1 Year - 9.30% to 10.95% (down)
2 Year - 8.98% to 10.65% (stable)
3 Year - 9.15% to 10.85% (down slightly)
4 Year - 9.10% to 10.35% (stable)
5 Year - 9.10% to 10.69% (stable)

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.