Public Trust raised rates

Press, 6 May 1983, Page 4

Public Trust raised rates

PA Wellington One of the Government’s agencies, the Public Trust, has been raising mortgage interest rates during the wage-price freeze. The Prime Minister, Mr Muldoon, criticised the Auckland Savings Bank earlier this week for increasing about 18,000 mortgage rates from 11.5 and 12 per cent to 13 per cent.

Mr Muldoon said that if other banks did the same, he might be forced to take action.

However, it appears that the Auckland Savings Bank is a follower, rather than a leader in revising its rates. The Eastern and Central Savings Bank, plus several other banks, have been reviewing rates and increas-

ing them to the maximum allowed under the November, 1981, financial services regulations.

An Assistant Public Trustee, Mr D. L. Allen, said yesterday that his office had been regularly reviewing mortgage rates and raising them to .their maximum permitted level of 14 per cent.

Some borrowers were still paying 9.5 and 10 per cent under the regulations, mortgage lenders were allowed to review rates to the maximum in force in November, 1981. This was also allowed under the freeze provisions. The trust’s top rate for housing loans to $25,000 is 14 per cent, with commercial and rural loans costing to 16 per cent.