United drops interest rate

Press, 29 August 1986, Page 4

United drops interest rate

The United Building Society has dropped the interest rate on all residential first mortgages

taken out before June 17 this year. The new rate is 19.75 per cent, and will be effective from October 2 for those with a onemonth notice clause or December 1 for those with a three-month notice clause. United dropped the rate for new mortgages to 19.25 per cent on June 17

and said existing mortgages would be reviewed from the end of September. The corporate affairs manager for the society’, Mr Tony Kunowski, said that United had delayed an announcement on the rate decrease for existing mortgages because of uncertainties in short-term trends in interest rates. United had wanted to avoid the possible embar-

rassment of dropping mortgage rates too quickly, then having to raise them again if the trends in retail funding rates suddenly reversed, said Mr Kunowski.

"We had hoped to bring all existing mortgage rates into line with our new lending rates. Unfortunately the retail funding rates have not dropped sufficiently to offset the high cost of funds obtained earlier in the year.”