BORROWERS Mortgage Commentary 01 / 2016
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Issue 2016 /1         12 February 2016

Welcome to the first fortnightly General Finance Mortgage Commentary for 2016.  We aim to keep you informed on developments at General Finance Home Loans and the mortgage market in general. 

The Money Market
This morning (noon on 12 February 2016) the money markets were at the following levels:
Official cash rate 2.50% (unchanged)
90 day bill rate 2.62 (down from 2.76)
1 year swap rate 2.54 (down from 2.70)
3 year swap rate 2.59 (down from 2.85)
10 year bond rate 3.01 (down from 3.54)
NZ/US dollar 0.6737 (down from 0.6750)

5,000 Loans
Earlier this year we reached a notable milestone - we have now settled our five thousandth home loan. This is great news. We started writing loans back in December 1998, first under the brand Cairns Lockie and later under a second brand General Finance. Initially we used securitised funding, which all ceased during the global financial crisis. Currently we are writing short term and bridging loans through our non-bank deposit taker, General Finance Limited. We are looking forward to writing more loans with your assistance.

Home Meal Delivery Market
With the success of My Food Bag over the last three years, it was only a matter of time before we saw more offerings in this convenience dinner space. WOOP (World On Our Plate) launched in August last year and is making big waves in Auckland. Their point of difference is that they make cooking easy. Each Sunday they deliver a box containing all the fresh and pre-prepared ingredients that you need to cook 3 dinners each week in 15 minutes. The food is delicious and we have been thoroughly enjoying it. Find out more here.

Housing costs will affect job growth
As Auckland is growing, it is creating several thousand new jobs each year. If these businesses are to continue to grow, then their current and new staff must be able to find suitable accommodation at reasonable prices. This is now becoming a serious issue. We believe that an Auckland loading will become widespread in areas such as policing, nursing and teaching. The private sector will have to increase their rates of pay for their Auckland staff. This will have the problem of making Auckland even more expensive. Solving the Auckland housing crisis is not just about getting first home buyers into their own property, but is about increasing the supply of rental properties as well.

Some Extra Funds
Just before Christmas we announced that we can now lend up to $800,000 on an individual security or as a total exposure. Over the next few months we are happy to go up to $1 million as we have some extra funds to lend out as well. Our loan criteria remains the same - we are looking at short term and bridging type loans.

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.