Average N.Z. farm has four mortgages

Press, 9 March 1984, Page 13

Average N.Z. farm has four mortgages

PA Wellington The average sheep and beef farm in New Zealand in 1980 had term liabilities amounting to $75,000 according to a report by the Meat and Wool Boards’ Economic Service. The average farm had four mortgages, with Rural Bank loans accounting for 35 per cent of the total term liabilities, the director of the Economic Service, Mr Neil Taylor, said in a statement accompanying the report.

Over-all mortgage interest rates averaged 8.4 per cent with a range from 2.5 per cent to 19 per cent. Rural Bank mortgage interest rates averaged 7.1 per cent and others averaged 9.2 per cent. The average mortgage term was 18 years, and so interest rates for many mortgages were fixed before the high rates of interest prevalent in recent years, Mr Taylor said. The predominant reason for mortgage borrowings were initial land purchase

(43 per cent of term liabilities), additional land purchases (15 per cent of term liabilities) with refinancing as the third most prevalent reason for borrowing. Mr Taylor said that interest charges represented 15 per cent of total farm expenditure on the average sheep and beef farm — the largest single item of exnpnditnrp