Please bear with us folks.
The new Financial Advisors Act (2008) that is coming into being has meant that we have to make some changes to the Oregon Finance Website.
At the same time we have decided to give the place a bit of a spruce up. 🙄
So some of the pages that were here, are for the moment, no longer.
Within a week or 2, we hope to be back on song.
The Official Cash Rate was duly cut last week, as was widely expected, by 0.50%. Home loan floating interest rates have followed suit. See the Reserve Banks Statement here.
The permutations of the move are still flowing through the home loan interest rate market.
Westpac Bank has followed up their cuts to home loan fixed interest rates from two weeks ago, with further cuts this morning. 6 months fixed now sits at 5.59%, pretty cheap money by New Zealand standards.
As an aside, we are working with some USA based clients at present, and one does a double take when one see’s a revolving credit facility on a rate of 2.74%.
Returning to life in New Zealand, all the major lenders appear to be back in the 95% lending market. One can but assume that they are of the belief that the property market is stable.
The median number of days taken to sell a property lengthened out to 58 in February. Compared with February last year, sales volumes were down 4.3%.
The ripples of the awful Christchurch earthquake are beginning to be felt in the Home Loan Fixed Interest Rate market. ANZ and National Bank have cut the majority of their Home Loan Fixed Interest Rates, with their 1 year fixed rate now sitting at 5.95%.
Our expectation is that the other major banks will follow suit to some extent shortly. And indeed, as i type, Sovereign has also cut their home loan fixed interest rates.
90 Day Bank Bills have also declined to around 2.86% from in the region of 3.18%. This is telling you that “the market” is expecting a cut in the Official Cash Rate at the next Reserve Bank Announcement on the 10th of March. These 2 indicators are the major influence on your home loan floating interest rate and hence, a decline in this could also be on the cards.
If you have recently purchased a property and have yet to settle the transaction or have a home loan coming off its fixed interest rate in the near future, may we suggest you hold off making an interest rate decision until after the Reserve Bank Announcement. Everyone’s circumstances are different but waiting may well lead to a clearer understanding of the Reserve Banks approach to handling the economy in response to the crisis.(and possible flow on’s to home loan interest rates)
These recent actions provide one example, highlighted in our last blog, of why we would have been in no hurry to jump lenders for Kiwibanks (or any other Bank’s) recently advertised home loan “special” 1 year fixed interest rate of 6.15%, which lasted for 3 weeks. The Bank has recently commented that the promotion was “extremely successful”.
Successful for whom?