CHIEF ECONOMIST CORNER: A FIRESIDE CHAT
Over recent years banks have increasingly employed the practice of adding Low Equity Margins (LEM) to home loan interest rates when they are lending for housing purchases with less than a 20% deposit.
A 2 minute read…Summary covers - Mortgage Borrowing Strategy, Inflation Watch, NZ Property Gauge and Economic Overview.
CHIEF ECONOMIST CORNER: INFLATION WATCH
In recent months movement among mortgage rates has been minimal, and the mortgage curve continues to echo a tick shape, with the sharp low point punctuating the 1-year rate mark. This makes it very clear that the 1-year terms are quite preferable.
These days if you’re buying a home in your twenties chances are you’ll be smugly feeling like you’re winning in life (even if you’ve had to cut back on morning latte and smashed avo brunches). But beware, there are a few mistakes young home buyers need to watch out for.
The government has set up an investment company to encourage building of user-pays trunk infrastructure in Auckland in an effort to speed up certain road and water pipe construction for new housing developments.
The Reserve Bank has long been concerned about the growth in high Debt to income (DTI) mortgage lending that New Zealand has seen in recent years and the financial risks that it poses.
Fixed Interest Rate Strategy – maintain a balance of risk by keeping a portion of your lending on shorter 1 -2 year fixed rates to take advantage of shorter term lower rates however look to lock a larger portion of your lending for at least 3 years to secure longer term certainty