Mortgage interest rates may rise

Press, 29 June 1982, Page 2

Mortgage interest rates may rise

Wellington reporter Although home mortgage interest rates are subject to the price freeze, interest rates that are due for review may still go up. This is because the regulations allow the rate's to be increased to the maximum being charged by the particular lending institution at the time the freeze went on. said a Reserve Bank spokesman yesterday.'

If a lending institution was making first mortgage finance available at rates ranging from 7.5 per cent to 15 per cent at the time the freeze went on. mortgages at the lower rates - if they fell due for review during’ the freeze — could rise to the 15 per cent level, the spokesman said.

What the regulations meant was that low interest rates on housing first mortgages. second mortgages, and hire-purchase, could climb to the maximum level as at June 22. when due for review, he said.

The spokesman said that the price freeze controlled more lenders than did the restrictions which were •placed on lending institutions on November 25, 1981.

The November regulations placed interest rate controls on lenders doing business with more than $2 million. The June 22 price freeze regulations spread restrictions to any person or institution with more than $lOO,OOO in outstanding loans.