Trusteebank drops new mortgage rate 1 p.c.

Press, 22 May 1986, Page 1

Trusteebank drops new mortgage rate 1 p.c.

By

SARAH SANDS,

property reporter

Interest rates on new mortgages from Trusteebank Canterbury were cut 1 per cent yesterday, continuing the recent downward trend of lending rates.

Mr Frank Dickson, the bank’s general manager, said that the new rate for housing mortgages would be 20.5 per cent, the same as the rate for existing mortgages.

The move, effective from yesterday, was in line with the market trend, he said. "At this stage, I do not envisage any movement in existing mortgages until the downward movement in deposit rates has firmed and has stabilised for a period.”

Mr Dickson said he did not think the interest rate on existing mortgages would drop before the end of the year.

Trusteebank had taken the first step towards lowering its rate six weeks ago when the term for its top deposit rate of 20 per cent was dropped from seven months to five months, he said. Last Friday, the 20 per cent rate was removed from the market altogether.

Mr Dickson said he did not think interest rates had yet settled. "I believe sincerely in what Mr Douglas, ’ the Minister of Finance, has said, that interest rates

will be volatile but with a downward trend, which means on occasion they will go back up again.” The public affairs manager of the United Building Society, Mr Tony Kunowski, said yesterday that United was in a state of permanent fine-tuning with its interest rates.

The society was considering its mortgage interest rates with a view to a possible downward movement, he said. United’s mortgage interest rate is 22.5 per cent for society members and 23.5 per cent for non-members.

Mr Murray McKinnon, public relations manager of Countrywide Building Society, said that no movement was planned for the society’s mortgage rate, which is 22 per cent.

Countrywide dropped its deposit interest rates two days ago and it would take time for the effects of this to flow through into mortgage lending, he said.

"Mortgage interest rates were the last to rise on the way up so the whole cycle has to follow suit on the way down. “All we can say Is that we are monitoring the

I would like to see them go lower than they have." Mr Brian Weeks, managing director of the A.N.Z. Bank, said A.N.Z.’s mortgage interest rate, at 19 per cent, was already considerably lower than the bank’s rates for other purposes. ; So far this year, A.N.Z. had reduced its lending rates 2.5 per cent, he said. The manager of public affairs for the ■ Wsstpac Bank, Mr Bill Dayu said

that no movement in mortgage interest rates was planned as yet “Our view is that if deposit rates continue this downward trend we should be able to see a flow-on effect to house mortgages a little later this year.” Mr Day said that general interest rates had been affected first because they had been so high. ' The National Bank dropped its top retail deposit rate 2 per cent earlier this week but has no immediate plans for its mortgage Interest rates.

situation daily as to what other financial organisations are doing.”

Mr McKinnon said that if the downward trend in interest rates continued, Countrywide was likely to lower its mortgage rates by the end of the year.

The group chief executive of the Bank of New Zealand, Mr Robert McCay, said yesterday that the bank was watching the market closely and would reduce its mortgage interest rates when it felt it was possible.

Last week, B.N.Z. cut its base lending rate 1 per cent.

“The interest rates are under review on a virtually daily basis because of the changing market. As soon as we feel we can we will be happy to see our mortgage rates move down.”

Mr McCay said that B.N.Z. had been pushing its deposit rates down first — something the building societies had been "lagging behind” with. “Their deposit rates are ahead of pure so they are making it difficult for us.