News - 7 August 2006

Problem Profile

FIXED INTEREST RATES EXPIRING - WHAT TO DO?

Over the next 6 months, there are a huge number of fixed rate mortgages expiring. What should you do, and who has got the best offers?

There are a number of key questions to ask first:

• Is this a personal or investment mortgage?
• What is your risk profile?
• Who is your existing lender and do you love them or hate them?
• What (if any) costs are there to exit your existing lender?
• Is your current loan structure suitable for your current and likely future needs?

Note that nowhere in this list does the question of interest rates come up! The interest rate environment is VERY competitive, and differences across lenders are relatively slight. Correct loan structure and other benefits are worth far more in the long term than a difference of 0.05% in the interest rate!

WHO DO YOU KNOW THAT HAS A FIXED INTEREST RATE DUE FOR RENEWAL? I AM OFFERING A FREE ONE HOUR CONSULTATION AT MY OFFICE TO DISCUSS YOUR INDIVIDUAL SITUATION AND WORK OUT THE MOST APPROPRIATE SOLUTION FOR YOUR UNIQUE CIRCUMSTANCES. CALL STUART NOW ON 021 676 747 to book your appointment!!

Food for Thought

As long as you believe in yourself, others will too! Cynda Williams

Interest Rate and Currency Comments

Domestic interest rates are in a "wait and see" pattern, with most of the action being in offshore markets. The Reserve Bank is unlikely to change its stance on local monetary policy for some months, meaning floating and short term fixed rates will remain static. Longer term rates are moving in line with changes in the US and the UK, with long term US rates falling slightly, but short term UK ones rising. Expect only small adjustments over the next month or so.

The kiwi has stabilised over the last week, particularly against the Aussie and the US dollar. This has been more a result of what is happening in their economies than ours! The Middle East situation could cause temporary spikes, but the longer term downward trend remains.

(See below for latest interest and exchange rates).

The Finance Markets

As of 8am on Monday 7 August 2006 the following Interest Rates applied:
Official cash rate 7.25% (stable)
90 day bill rate 7.48% (down slightly)
5 year bond rate 6.13% (down)
NZ/US Dollar 0.6186 (down from 0.6225)

Current Range of Interest Rates for home and investment mortgages as at 7 August 2006.

Floating:
8.60 to 9.95% (stable)

Fixed For:
1 Year - 7.85% to 9.00% (stable)
2 Year - 7.75% to 8.95% (stable)
3 Year - 7.65% to 8.95% (stable)
4 Year - 7.85% to 8.46% (up slightly)
5 Year - 7.65% to 8.39% (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.