MORTGAGE RATE REDUCTION FORESHADOWED

Evening Star, Issue 20117, 6 March 1929, Page 6

MORTGAGE RATE REDUCTION FORESHADOWED

MUCH MONEY AWAITS INVESTMENT result of export surplus (Special to the ‘ Star.’] CHRISTCHURCH, March 5. A reduction of I per cent, in the mortgage rate is foreshadowed by a leading banker in 'Wellington. Unless the Government decides to boat another internal loan, financiers in Wellington agree that the rate for second mortgages will soon drop to 61 per cent., unless the money available finds large channels of investment very quickly. A certain amount of business is already being done at that figure, which is- expected to become general before very long. . The general opinion in financial circles in Christchurch is that the rate of interest is falling. First mortgages have come down from 6 J 2 per cent, to 6 per cent., and it is reported that some have been arranged at lower than G per cent. It appears that long term rates ot interest all over the world are falling, and it is because of this that tho Government can borrow money more cheaplv now than it could before. Within New Zealand, largely as the result of the export surplus of last year, there has been a considerable accumulation of money in the hanks, an exceptionally large proportion of which is on fixed deposit. It seems that people with money to invest cannot fiiuf suitable avenues for their funds at the present rate of interest, and such accumulations of money seeking an outlet will very probably lead shortly to further drops in tho interest rates.