Three sources put up mortgage interest rates
PA Auckland Three big sources of home finance yesterday announced increased interest rates on new mortgages. Directors of Southern Cross, Marac, and Countrywide thus joined United in offering first mortgages at 14 per cent and second mortgages at 16 per cent. The secretary of Southern Cross, Mr Barrie Collett, said in Auckland that the new rates were less than the building society had been charging before the outgoing Government in December forced rates down to 11 per cent for first mortgages and 14 per cent for second mortgages. “The rates are not settled on the market yet, so we do not know for how long we can continue offering these rates,” said Mr Collett, but he hoped that they could be contained.
The chief executive of Countrywide, Mr Peter Martin, said in Auckland that the cost of funds was rising. To attract investors, the society yesterday introduced a threee-year rate of 13.5 per cent on deposits, 12.75 per cent over 18 months, and a 30-day term at 10.25 per cent. On Friday, Countrywide increased its on-call deposit rate to 10 per cent.
Other Countrywide term deposits were adjusted yesterday. A two-yeaar term earns 13 per cent; one year, 12.5 per cent; nine months, 11.75 per cent; six months, 11.5 per cent; and three months, 105 per cent. Marac, which runs a building society as a separate entity from its other finance business, has announced new rates for building society term deposits in conjunction with increases in first and second mortgage rates. Rates announced yesterday for on-call money range from 9 per cent to 10 per cent, according to the amount deposited and on deposits which can be withdrawn on seven days notice; 10.5 per cent on amounts from $250 to $19,999; and 11 per cent on $20,000 or more. Term rates range from 10 per cent for one month to 12.5 pr cent for one year, 14 per cent for two years, and 14.5 per cent for three or more years. The New Zealand investment managemer of Marac, Mr Don Lockyer, said in Auckland that since the December regulations, which pegged mortgage rates to 11 per cent for first and 14 per cent for second, Marac had not reduced its mortgage lending, and up to $2 million a month had been advanced on mortgages.
Trusteebank Waikato has set new long-term residential first mortgages at 14 per cent and second mortgages at 15 per cent. Existing first mortgages which had been reduced to 11 per cent would remain at that rate “in the meantime,” said the bank’s general manager, Mr Ross Mcßobie. New rates on deposits ranged from 10 per cent interest on “hit” accounts to 12.5 per cent on two or three-year deposits. Changes to mortgage and other lending rates by Trusteebank Canterbury are expected to be announced in the next week. The bank’s general manager, Mr Frank Dickson, said this week that a 2 per cent increase in deposit rates could be “some kind of an indicator” to the level of increase in lending rates. . Among finance companies, Feltex Finance yesterday increased its debenture deposit interest rates to: call, 9 per cent; 90 days, 10 per cent; 180 days, 11 per cent; one year, 13.75 per cent; 18 months, 14.5 per cent; two years, 15 per cent; three years, 13.75 per cent; four years, 13 per cent. The manager of the company, Mr Stewart Mainwaring, said that at present its lending rate was unchanged at 17 per cent. About 90 per cent of Feltex Finance’s
business is with the Feltex subsidiary, Smith and Brown. The managing director of ■ General Finance, Mr Tony Hassed, confirmed that his company has set rates 2 per cent higher with a peak of 13 per cent on two-year debentures and 12.5 per cent for one year. He agreed with the need for financiers to be “responsible in the direction of rates” and General Finance’s lending rate was being held at 19 per cent. The president of the Building Societies’ Association, Mr Roy Broad, said that building societies generally were exercising moderation in interest rates being offereed savers and investors. The market still had to settle down but term investment rates available from societies were likely to pivot round a rate of about 12.5 per cent a year for a one-year term. This was likely to position building societies’ rates alongside those being offered by banks but slightly less than those offered by finance houses at present, he said. Mr Broad said it seemed likely that building societies would now charge 13.5 per cent to 14 per cent on first mortgages for owner-Occu-pied home finance.
Permanent link to this item
https://paperspast.natlib.govt.nz/newspapers/CHP19840725.2.46
Bibliographic details
Press, 25 July 1984, Page 8
Word Count
777Three sources put up mortgage interest rates Press, 25 July 1984, Page 8
Using This Item
Stuff Ltd is the copyright owner for the Press. You can reproduce in-copyright material from this newspaper for non-commercial use under a Creative Commons BY-NC-SA 3.0 New Zealand licence. This newspaper is not available for commercial use without the consent of Stuff Ltd. For advice on reproduction of out-of-copyright material from this newspaper, please refer to the Copyright guide.
Copyright in all Footrot Flats cartoons is owned by Diogenes Designs Ltd. The National Library has been granted permission to digitise these cartoons and make them available online as part of this digitised version of the Press. You can search, browse, and print Footrot Flats cartoons for research and personal study only. Permission must be obtained from Diogenes Designs Ltd for any other use.
Acknowledgements
This newspaper was digitised in partnership with Christchurch City Libraries.