Mortgage rates still rising

Press, 29 June 1983, Page 1

Mortgage rates still rising

PA Wellington Mortgage interest rates are rising in spite of the wage and price freeze regulations. Finance companies say the increases are legitimate under the freeze. The Labour member of Parliament for Eastern Hutt, Mr Trevor Young, highlighted the issue yesterday when he presented a .case of a Stokes Valley couple, who had been advised that their home mortgage interest rate would increase more than 30 per cent. The executive director of the Life Offices Association, Mr Barry Bryant, said last evening that all interest rates were frozen on November 25, 1981. However, most mortgage policies had a variable clause included where the interest rate was subject to a review. This clause enabled companies to increase the interest rate, provided it was no higher than the level frozen in November, 1981. “It is quite permissable, but can only be done when a mortgage is reviewable.” Finance houses said mort-

gage interest rate increases had been widespread since the freeze was enforced. The investment manager for A.M.P.. Mr Grahame Hambling, said that his company had increased some mortgage interest rates. “I think most companies are doing U," he said. "When people get a loan it’s under the condition that it can rise. About 80 per cent of our policies are subject to an interest-rate review — and we have had few complaints.” Mr Hamling said the review clause was introduced in the mid-19705. “But if interest rates have fallen when the review comes up we also have to pass on the decrease to the mortgageholder.” National Mutual’s assistant general manager of finance, Mr Murray Austin, said that his company was also increasing its mortgage interest rates when review dates came up. “But nobody is being charged more than the rate in November, 1981," he said. The most common review for a mortgage was every three years.