April has been a busy month in the financial sector!
There have been a number of things that have taken place that just might save you a lot of time, stress and money!
The Official Cash rate could be on the move down after predictions it would remain constant for the next few years, long term mortgage rates continue to drop, and steps are being taken by parliament to ensure you receive financial advice you can always trust.
Let’s look into these things in greater detail…
The Official Cash Rate (OCR)
Economists have long held the view that the OCR will remain steady until 2021. However, in the last couple of weeks, opinion is starting to shift.
The possibility of a cut in the Official Cash Rate is starting to grow. In fact, many economists believe that we will see a cut in the near future, or at least that the Reserve Bank will be more open to the potential for a cut. Some believe this could happen as soon as May or August.
What has signalled this change in opinion?
The Reserve Bank has shocked people with recent comments that due to slow growth both here in New Zealand and overseas, the next OCR move is “likely to be down”. Recent data reports have shown a weaker than expected business confidence. And, overseas influences also play a part. The RBNZ will need to consider what the world’s central banks do and how that will impact the exchange rate. Australia’s Reserve Bank is expected to reduce its cash rate in both August and November. Those actions could influence the decision of RBNZ.
What does it all mean?
For now, it is a case of waiting to see what happens. If the cash rate is cut here in New Zealand then that could impact mortgage rates and lending confidence. Only time will tell.
Interest Rates
Speaking of interest rates, they continue to remain low. All of the major banks currently have offerings below the 4% threshold. They vary between one, two and three year options. This shows an expectation that rates are going to stay low in the longer term.
ANZ is the only major bank offering a rate of 3.95% for a one year term. But Westpac, BNZ and ASB are all offering 3.95% for a three year term.
These are the lowest rates we have seen in 80 years. So, if you are looking for long term certainty in your repayment amounts, now is the time to review your mortgage. Especially if your current mortgage is fixed at a higher rate. Often, there are savings to be had even if you need to pay a fee to break your current rate agreement.
If you would like a no-obligation review of your current mortgage rates and structure, then I am more than happy to explore if there are savings to be had for you. Get in touch with me today to discuss your options.
The Right Kind Of Advice
You may have heard that there have been recent reviews of the way financial advice is distributed in both New Zealand and Australia. This has largely been because of the negative practices recently uncovered in the Australian market.
This has led to reform in both our countries to ensure that all financial advice is impartial and focused on what is best for the client (that means you!). Here at Mortgage Suite, our focus has always been on getting the best outcome for your individual situation, so we welcome these reforms with open arms.
The Financial Services Legislation Amendment Bill has been in the works for a while now, and earlier in April, it passed its third reading in parliament. That means it now moves to Royal Assent to become law.
The bill is designed to ensure all New Zealanders have access to high quality financial advice. Before the bill, the regulations were relatively loose. Advisers could recommend a product simply based on the commission they would earn from it. But now, “financial advice providers will be accountable for the advice provided to customers on their behalf, and will need to disclose key information to clients so they can make informed decisions.” [source]
This is fantastic news for the industry as all Advisers will need to provide the same honest and impartial advice that we give at Mortgage Suite.
There is a lot going on in the financial sector currently. But with a lot of action comes a lot of opportunity for you. Something as simple as a review of your mortgage could end up saving you thousands of dollars in the long run.
If you are interested in knowing more about how you can improve your financial position with the recent changes in the market, then get in touch with Mortgage Suite for a no-obligation review. You never know what you might find out!