Trusteebank raises interest rates

Press, 9 November 1984, Page 7

Trusteebank raises interest rates

Trusteebank Canterbury will increase from today its interest rates on new loans and mortgages. Rates on existing loans may go up later.

The bank’s house mortgage rate will increase by one percentage point, to a true 16 per cent, and other rates will increase according to the security offered, the term and nature of the loan, and the account history of the applicant.

The general manager of the bank, Mr Frank Dickson, said the move had been taken with “the utmost reluctance.”

“As the biggest home

lender in Canterbury, Marlborough, and Nelson we have a responsibility to keep mortgage interest rates at the very lowest level at which the bank can operate,” Mr Dickson said.

“But in the end it is simply the cost of money which determines the rate at which the bank can lend,” he said. Since the recent introduction of new term investment rates, deposits had increased but almost entirely at a cost of 16 per cent “In spite of the increase in interest rates, the bank is still lending at the lowest true rate of any major

lender in the private sector,” Mr Dickson said.

The increases are a reflection of the general rise in interest rates since the election of the Labour Government

Lending rates by banks and other financial institutions are almost always higher than the interest rates paid on Government stock.

The rates paid by the Government in recent tenders are up to an unprecedented 17.25 per cent These rates set the guidelines for all interest rates in the economy, in this case raising them to historically very high levels.