STATE ADVANCES

Wanganui Chronicle, Volume LXXXII, Issue 19475, 15 December 1925, Page 7

STATE ADVANCES

RATE OF INTEREST INCREASED. A SUBSTANTIAL RISE. [Fer Press Association.) WELLINGTON, Dec. 14. Tho rate of interest on loans obtained through the State Advances Office has been increased as from December I. Up to the present money hits been available at 4£ per cent interest plus A per cent, for sinking fund. Loans for building purposes will now bo available at 6.1 per cent., reducible to 5$ per cent, net on prompt payment of interest, plus 1 per cent, for sinking fund or 2 per cent, if tho mortgage is for a greater term than tho ordinary 36 A years. If a person desires to borrow money for repayment of an old mortgage, he will now be required to pay 6£ per cent, on prompt payment of interest, plus 1 per cent for sinking fund charge if tho loan is for 36| years. If the loan bo for a shorter period, the State Advances Board has power to fix the sinking fund charge at 2 per cent. Loans for repayment of old mortgages up to tho present have been available at about 51 per cent., but under the increase which has now been effected persons borrowing money through the State Advances Office to repay an old mortgage may have to pay as much as 8 per cent for accommodation. Several times before and during la.t session of Parliament, a Ministerial indication was given that there was a likelihood of rate of interest on State Advances being increased at an early date, but up to tho present no official pronouncement had been made.