News - 4 September 2006

I WILL BE AWAY OVERSEAS FROM FRIDAY 15 SEPTEMBER UNTIL SUNDAY 15 OCTOBER INCLUSIVE. IN MY ABSENCE, PLEASE CALL:

ANDREW MACREADY (529 1250 OR 021 447 494), OR

TODD REED (524 6029 OR 021 767 040)

Problem Profile

ARE YOU COMING OFF A FIXED INTEREST RATE SOON??

A very simple piece of advice - call me first (or one of the contacts above) before doing anything! Spring discount packages have started early this year, with HUGE COMPETITION AMONGST LENDERS. All the banks are very keen to hold on to their existing clients and steal new ones from each other.

Incentives to change and/or stay include:

• Low fee or no fee accounts
• Interest rate discounts of 20 basis points or more (depending on rate chosen)
• Waiver of Lenders Mortgage Insurance Charges
• Contributions of $500 or more towards the cost of change
• and lots of other incentives

WHO DO YOU KNOW THAT HAS A FIXED RATE LOAN MATURING SOON?? DON'T LET THEM PAY TOO MUCH WHEN REFIXING!! GET THEM TO CALL STUART NOW ON 021 676 747 to see what their best option is.

Food for Thought

You don't get to choose how you're going to die or when. You can only decide how you're going to live. Joan Baez

Interest Rate and Currency Comments

The major drivers of local interest rates are long term US interest rates (which are falling), and competition amongst lenders (which is starting to intensify). Thus there is likely to be downward pressure on rates over the next month or so, although it will be constrained by local economic forces. These indicate no drop in the Official Cash Rate for at least 12 months. Keep your eyes out for a bargain, and be prepared to move quickly!

The kiwi dollar has confounded the "experts" by racing ahead by over 2 cents US in the last week. This is due to indications that US interest rates are not going to continue to go up (and may come down sooner than later) whilst our rates are likely to be up for some time to come. This is a "blip" in the trend, but a significant one at that!

(See below for latest interest and exchange rates).

The Finance Markets

As of 8am on Monday 4 September 2006 the following Interest Rates applied:
Official cash rate 7.25% (stable)
90 day bill rate 7.50% (stable)
5 year bond rate 6.13% (down)
NZ/US Dollar 0.6562 (up from 0.6395)

Current Range of Interest Rates for home and investment mortgages as at 4 September 2006.

Floating:
8.60 to 9.95% (stable)

Fixed For:
1 Year - 7.85% to 8.90% (stable)
2 Year - 7.75% to 8.85% (stable)
3 Year - 7.65% to 8.85% (up slightly)
4 Year - 7.79% to 8.37% (stable)
5 Year - 7.65% to 8.29% (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.