Trusteebank sets interest at 19%

Press, 1 July 1985, Page 9

Trusteebank sets interest at 19%

Trusteebank Canterbury mortgage interest rates will increase to 19 per cent from October 1, says the bank’s general manager, Mr Frank Dickson.

The increase was a belated cost recovery exercise, Mr Dickson said yesterday. Interest rates on deposits had risen in March and Trusteebank Canterbury had then reset its mortgage rates to 17 per cent, to apply from July 1. Since March the interest rate on deposits had increased at least 2 per cent. Trusteebank mortgage rates traditionlly had been a little lower than those at

other banks, he said. Some people were paying up to 23 per cent elsewhere for first mortgage money. Mr Dickson said that Trusteebank Canterbury

sought to recover only what was necessary, and “perhaps our costs of administration are not as high as others.” “Nineteen per cent is as

fair as we can make it — certainly we wish it was lower.” Mr Dickson said that mortgage rates were likely to fall only after depositing interest rates had fallen “and they have not come down yet.” The bank would reduce the interest rates as soon as possible. Mr Dickson said he hoped this would be within the next six months but it was not wise to predict. “I’m not an economist.”

The Minister of Finance, Mr Douglas, had said that he did not think interest rates would fall before Christmas “and I don’t think they will,” said Mr

Dickson. “I would be surprised if they (interest rates) did not come down markedly below 15 per cent but what we are seeing now is that interest rates are geared to inflation.” Mr Dickson said that the bank had not called up any mortgages even though a number were in arrears. Many of the payments in arrears were in cases of matrimonial settlement where neither party would accept liability for debts. The bank was as understanding as it cotild be with mortgage payments and anyone who was worried about their ability to pay was welcome to go to the bank and discuss it. The bank could not reduce interest rates but it could restructure payment of the debt, he said.