BORROWERS Mortgage Commentary 06 / 2011
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Issue 2011 / 6   21 April 2011

Welcome to the first fortnightly General Finance Mortgage Commentary for 2011.  We aim to keep you informed on developments at General Finance Home Loans and the mortgage market in general.  Previous issues of this commentary can be found on our website

The Money Market
This morning (9am on 21 April 2011) the money markets were at the following levels:
Official cash rate    2.50% (unchanged)
90 day bill rate       2.65 (unchanged)
1 year swap rate    2.85 (up from 2.77)
3 year swap rate    3.95 (up from 3.85)
10 year bond rate   5.74 (down from 5.75)
Kiwi dollar         0.7968 (up from 0.7787) 

Auckland Extends Home Insulation Scheme
The new Auckland City Council is about to introduce a regional wide programme to allow householders to apply for financial assistance from the council to insulate their homes.  The maximum that can be applied for is $5,000 including GST.  The loan can be repaid, interest free, over a term of up to nine years through your rates bill. A homeowner needs to get a quote for insulating their home and submit this to the council for approval. The aim of this incentive is to encourage people to live in warmer and dryer houses. Some other councils across the country have similar schemes operating. The Government has a scheme as well. If you are thinking of insulating your home, and we believe this is a good idea, first see if you qualify for the Government scheme (it is more generous) and then, if you cannot, check with your local council to see if they have a scheme operating.

Houses are Getting Bigger
Over the past sixty years houses have been getting bigger. According to Quotable Value, in a recent report, the average size of a New Zealand house is now 149 square metres. Older established areas, particularly smaller towns, such as the Buller district on the West Coast, Ruapehu in the Central North Island, and Wairoa near Gisborne all have the smallest houses. Their size ranges from 110 to 120 square metres. The newer areas of larger cities such as Auckland’s North Shore, Rodney district near Auckland, Tauranga, parts of Hamilton and Paraparaumu, north of Wellington all have largest houses. They range in size from 160 - 180 square metres. What is interesting is that this is occurring while families are getting smaller. The idea of the 1950's of two or three or even four siblings sharing the same bedroom has all but gone. 

Revaluating of Auckland Properties
Late last year the seven territorial councils of Auckland and the regional council combined to form the super city of Auckland. Each council had different dates for updating their council valuations. All of Auckland now has one date, and it is this year.  Quotable Value has all ready started the process. Householders are expected to receive notification of their new valuation in November this year. There is an opportunity to object if you feel your valuation is not quite correct.

We Have Funds to Lend
Currently our associated company General Finance has funds to lend. Over the past few months we have seen a number of investors returning to us.  This is positive. As a result we have additional funds to lend. These funds are available for short term or bridging purposes. We will still look at lo doc type transactions or those with limited financial information. We are seeing a number of clients who require a little bit of extra time to sort out their finances before they are able to approach a more permanent long term lender. We welcome your enquiries.

Mortgage Interest Rates
For updated mortgage interest rates, either for new business or applicable to your existing loan, please contact your Lender (below) or the General Finance Limited Loan Administration Department.

As everyone's personal circumstances are different and the tax treatment of their affairs is always determined by their own circumstances, you should not act on any comments made in our Commentary without obtaining your own independent professional advice.

General Finance Limited is a Registered Financial Services Provider, with registration number  FSP8882.