Official Cash Rate
The Official Cash Rate remained unchanged this morning but there are still talks of a potential drop in this later in the year. Because banks may already be counting on a drop in the OCR there is no guarantee that interest rates will drop if the OCR does move down a gain. Conversely if the OCR did not drop then we may see an increase in short term interest rates. At the moment the bank economists that we get our information from are suggesting equal chances of a decrease or increase later in the year depending on economic data for Employment and Retail Spending.
Regional House Prices on the rise
It will come as no surprise to most of you that regional NZ is seeing a good increase in house prices this year. If you want to read more from Corelogic's monthly report for may the link is below.
Corelogic May Property ReportChanges to over 80% LVR lending
If you've got less than 20% deposit a few banks have made some changes which may effect you. The main one that is a big hassle is that some lenders are now not doing pre approvals in this area.
With each bank having restrictions on how much money they can lend to people with less than 20% deposit we are finding a massive variability between lenders. I'll be writing a blog shortly to explain how we can make sure you're getting your foot in every possible door to give you the best chance of borrowing with less than 20% deposit.
By way of an example BNZ were doing no over 80% lending for new customers for most of May, where ASB were doing a lot. This is the complete opposite of earlier in the year and it could change again next month so you need to make sure all banks are being covered... they all have different ways of charging interest rates and fees for people with lower deposits too but that's another one I'll have to cover in more detail in this upcoming blog.