You may have noticed the continued level of media interest with regards to what interest rates are doing. There certainly has been considerable drops in the floating rates with some further increases in the fixed term rates. This is where it is becoming critical to work out the loan structure for your needs.

You are able to make some considerable gains by keeping your payments at the level they are now but taking a short term low interest rate that will allow you to repay more principal. Talk to the team at The Home Loan Group (NZ) Ltd and we can explain this further.

SEPTEMBER 2008

The Reserve Bank has reduced the Official Cash Rate (OCR) today by half a percent, from 8.0% to 7.5% due to an economic slowdown. Reserve Bank Governor, Alan Bollard, stated that the declining inflation pressures will determine the scale and timing of further OCR decreases.

SEPTEMBER 2009

Today we see an offical cash rate of 2.5%. It is amazing to see the changes that have taken place this year.

At the last announcement, Reserve Bank Governor Alan Bollard said: “There is more evidence that the decline in economic activity is coming to an end, and that a patchy recovery is underway.

“This is partly due to recovery in our trading partner economies in the June quarter and these look likely to continue expanding in the short term. Domestically, retail spending appears to have stopped falling, following a rise in net immigration and a pick-up in the housing market over recent months.

“However, the medium-term growth outlook remains weak. We expect household spending to grow only modestly given weak income growth and a reduced appetite to take on debt. Business profits are under pressure because of the low level of activity and the elevated New Zealand dollar; this limits the scope for employment and investment to rebound quickly.

At The Home Loan Group (NZ) Ltd we are constantly looking at obtaining new interest rate options for clients who are nearing the end of their existing fixed rate period. This allows the opportunity to consider your options and loan structures that reflect your current situation.

Please give the team at The Home Loan Group (NZ) Ltd a call and arrange a time to meet with us to discuss your options.

ASB has reduced its floating home mortgage rate by 65 basis points taking it to 5.75% - the lowest its been in more than 40 years.

"This is our lowest home loan floating interest rate since December 1967, the year that decimal currency was first introduced in New Zealand," ASB chief executive Retail Banking Ian Park says.

It has also increased some fixed term home lending rates and lowered short term deposit rates.

"ASB's new lending rates have been rebalanced to reflect our cost of funds and the level of risk associated with each lending category," Park says.

"Our new interest rate structure reflects the changing cost of offshore funds, which we rely on to supplement the funds our local depositors entrust us with. Together these deposits cover the amount we are lending out to our customers.

Source; Good Returns, Friday 4 September

The Government's decision to extend the retail deposit guarantee scheme will alleviate a source of uncertainty for the finance industry, but still leaves some tough questions.

The deposit guarantee was introduced last October at the height of the credit crisis, when many countries were introducing or expanding government protection for retail deposits. The concern at the time was that without a similar guarantee in NZ, depositors would flee offshore (specifically to Australia) to benefit from this protection.

The scheme was initially set to expire in October 2010, which was expected to be well beyond the crisis period.

Source; Westpac Economic Dept, 31 August

As life continues on we all come to different events that have an effect on our life in one way or another. With these events and changes come a change in your life risks.

As part of our service we can assist you in assessing your financial risks and look at ensuring you have the right insurance cover in place to meet your needs.

CALL US now at The Home Loan Group (NZ) Ltd and see what we can do.