Big lift in P.O. home loans

Press, 13 April 1985, Page 1

Big lift in P.O. home loans

Wellington reporter

Increases in the amount home buyers and renovators can borrow from the Post Office, and higher interest rates, were announced last evening by the PostmasterGeneral, Mr Hunt. Mr Hunt’s announcement was the first of a series arising from a review of Post Office services and charges. A further announcement is expected today on postal and telecommunication charges. The amount available for loans from the Post Office Savings Bank will increase from Monday 33 per cent to a maximum of $60,000, and only one mortgage will be needed to cover the amount

borrowed, Mr Hunt said. A single mortgage would reduce legal costs to borrowers, he said. However, interest rates will be set at 16 per cent up to a limit of 70 per cent of the market value or $45,000, whichever is the lesser amount. The rest of the loan will attract an interest rate of 19 per cent. These terms apply to applicants with a savings history with the P. 0.5.8. Under the changes announced yesterday, other applicants without a savings history can also receive loans from the P. 0.5.8., but they will be charged 19 per cent interest.

Loans for housing pur-

poses will be for terms of up to 25 years in yearly steps. Home Ownership account holders will have the interest rate on their supplemented mortgages raised to 13.5 per cent, but they will still be eligible for benefits under this scheme. Mr Hunt said that in all cases where a loan was secured by real estate, the sum of all mortgages must not exceed 90 per cent of the current valuation.

Changes to personal loan terms were also announced. These will see the maximum amount that may be advanced raised to 100 per cent of the value of the holdings or $60,000, which-

ever is the lesser amount. Personal loans will attract an interest rate of 16 per cent on amounts of up to $45,000 on a lesser amount where /the savings history criteria >are not met. The rest of the loan will be charged 19 per cent interest. Where a personal loan is secured by real estate, the maximum amount that may be advanced will be $20,000 and for a term/ of one to 10 years. The interest rate will be 16 per cent where the savings history criteria are met and 19 per cent for others. New interestrates for personal loans will be 19 per cent for those secured against securities other than

Post Office Savings Bank deposits, and 20 per cent for unsecured and partly secured loans. Mr Hunt said the changes were part of a continuing review of P. 0.5.8. services and recognised the strong competitive environment in which the P. 0.5.8. worked. Interest rates charged by the Post Office at present are: First mortgages (up to $30,000), 14 per cent; second mortgages, 16 per cent; Home Ownership supplemented mortgages, 11.5 per cent. Personal loans, secured by P. 0.5.8. deposits, 16 per cent; secured by nonP. 0.5.8. assets, 17 per cent.