Equity-share interest down

Press, 16 April 1986, Page 2

Equity-share interest down

PA Wellington The 17.8 per cent interest rate on Housing Corporation equity-shar-ing house scheme loans would drop to 15.6 per cent on loans issued after April 1, said the Minister of Housing, Mr Goff, yesterday. The 2.2 per cent decrease was directly related to the drop in inflation, he said. The interest rate on the loans under the scheme was set at the rate of inflation with a loading to cover administrative costs.

The decrease should give a lead to private finance companies to cut interest paid on deposits so mortgage rates could begin to track down, Mr Goff said.

“The gap between inflation and interest rates is

now far too wide,” he said. “With inflation at 13 per cent and falling, major home loan lenders have got the signals they need to lower immediately the interest rates on deposits,” he said. The new lending rate for equity-sharing finance applied to loans issued from April 1. Fifty-four such loans had been issued since then and another 15 houses were to be balloted in Whangarei yesterday, Mr Goff said. The 213 people with equity-sharing houses would have their interest rates reviewed on the first anniversary of loans being advanced, he said.