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Mortgage products of the future

William Cairns wonders about mortgage products of the future.

Wednesday, November 6th 2002, 9:43PM

by Jenny Ruth

William Cairns of mortgage provider Cairns Lockie has been crystal ball-gazing lately about what further innovations might be expected in the market.

One product he expects to hit New Zealand within the next couple of years is a loan for up to or even more than 100% of the value of owner occupied residential properties.

Loans are available in the US for greater than 100% of value, but only for refinancing.

Already, PMI is willing to approve loans in Australia for up to 97% of a property’s value, Cairns says. But not anyone can get such loans.

Particularly with the Australian market looking distinctly bubble-like – Sydney house prices have gone up 70% in the last three years – "it’s very, very risky," Cairns says.

"It’s only applicable to borrowers who have an impeccable credit record and a good job." Lenders are targeting the 28 to 35 year olds returning from overseas with professional qualifications such as accountants and lawyers, "people who’s incomes are likely to rise and who are very unlikely to default."

"You’re not going to see a 50 year old getting this sort of deal," he says.

Such loans are likely to be less risky in New Zealand. Even in the frothiest market, Auckland, the median house price in September was only 13.8% higher than three years ago with most of that increase, 9.6%, occurring in the last year.

At the other end of the spectrum, Cairns, who is also an Auckland City Councillor, wonders whether the government might switch from paying accommodation supplements to providing some form of mortgage assistance.

That’s reminiscent of the old State Advances Corporation which allowed families to capitalise their family benefits and provided low interest rate loans.

Possibly, the government could develop a formula for providing deposits for those who can’t afford to save, but Cairns hopes it won’t follow Australia’s example. Australia has been providing housing subsidies of A$14,000 to first-home buyers, since reduced to A$7,000.

"That’s a stupid thing because they give it to everybody. All that does is stick up the price of housing by A$14,000."

« Kiwibank not a threatHousing market healthy not feverish: NBNZ »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 ▼6.79 ▼6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 ▼7.29 ▼7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 ▼7.39 ▼7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 ▼6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 14 March 2024 9:32am

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