Society? bank cut mortgage rates

Press, 24 May 1988, Page 15

Society ? bank cut mortgage rates

PA Wellington The Unitied Building Society and Countrywide Bank have cut their mortgage lending rates. Countrywide Bank has reduced its rate on new first mortgages by 1 per cent to 16.5 per cent from yesterday and United will lower mortgage rates to its existing borrowers by 1.5 per cent to 17.5 per cent effective from July 1. The rate for new second mortgages at Countrywide also falls 1 per cent to 19 per cent. United is to cut its Visa rate by 2.5 per cent to 21.5 per cent from the next billing cycle. Existing loans at Countrywide, on which the interest rate has just fallen to 17.5 per cent, will be kept under review. The managing director, Mr Peter Martin, expects a further cut for those loans

soon. Countrywide has also cut by 2 per cent its Visa rate, now 24 per cent, and the rate on secured personal loans, now 20 per cent. Mr Martin said Countrywide’s moves were dictated by the cost of funds to the bank, but much of the past week’s rate-cut-ting appears to have had more to do with image and lenders’ comparative positions than with the cost of their own borrowing. The National Bank, after announcing a package with a 16.75 per cent floating rate on Tuesday, came back to 16.5 per cent by Friday. Also moving to 16.5 per cent were the ASB and the BNZ. The ASB will hold a half-per cent margin for new customers and will bring existing loans to the

new rates from July. Late pn Friday, Westpac again moved to the forefront, dropping its rate on all mortgages from 17 per cent to 16.25 per cent, effective from June 10. “We are trying to give the impression of being a bank that is consistently on the lower end,” said the public affairs manager, Mr Bill Day. “We will be reviewing it again next Friday.” Provincial trustee banks have also started to lower their rates, led by Taranaki with a 16 per cent rate for first-home buyers 17 per cent for other first mortgages. Eastern and Central and Wanganui have lowered their rates to 16.75 per cent, Waikato to 17 per cent, Bay of Plenty to 17.5 per cent and Wellington to 17.75 per cent.