Loan scheme delayed Forecasts

Press, 2 August 1983, Page 1

Loan scheme delayed

Forecasts

Confusion caused by the Government’s call to lower interest rates has delayed the Post Office’s entry into the first mortgage market. The Postmaster-General, Mr Talbot, announced on July 18 that the Post Office would lend first mortgage finance from August 1. However, he said on Friday that acceptance of applications from homeownership account holders who did not qualify for Housing Corporation advances would be deferred for a few days.

Mr Talbot said that the starting date had been put back because the terms and conditions under which the loans would be granted had not been finalised.

The acting Chief Postmaster in Christchurch, Mr J. M. Kinraid, said that the service had been postponed until the interest charges had been set, “hopefully some time this week.” Reaction in Christchurch to the news that the Post Office would lend first mortgage money had been limited.

“Certainly there has not been any rush to open accounts and I do not think that there will be much change until the interest rates are announced. Most people are waiting to find out what is happening.” The pre-budget instruction from the Prime Minister, Mr Muldoon, to private sector lenders to bring down their interest rates had thrown all financiers into a state of flux, said Mr Kin-

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raid. Mr Talbot’s secretary for Post Office affairs, Mr Les Anthony, said yesterday that the Minister had hoped to announce the rates that day, but that Treasury and Post office officials were still deciding them. “We had not anticipated the Prime Minister’s call to lower interest rates,” he said. The Christchurch manager of the Housing Corporation, Mr D. Cattanach, has welcomed the announcement that the Post Office will begin lending on first mortgages. “It has seemed wrong that the corporation should be committed to lending on low interest rates to people who could afford to borrow at a higher rate,” he said. Under the terms of a scheme introduced in 1974, Post Office home-ownership account holders were treated as a preferred group by the corporation, with public servants on transfer and Armed Forces personnel.

It meant that some — about 100 a year in Christchurch — received loans although they exceeded the corporation’s income limit. However, Mr Cattanach said that although this group would probably have to pay a higher interest rate if they borrowed from the Post Office than the 9 per cent charged by the corporation, they would probably receive a bigger first mortgage.

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