The waikato Times THURSDAY, DECEMBER 19, 1935. MORTGAGE RATES

Waikato Times, Volume 118, Issue 19763, 19 December 1935, Page 8

The waikato Times THURSDAY, DECEMBER 19, 1935. MORTGAGE RATES

When the course of the depression in New Zealand, _ and the efforts made to adjust internal conditions, come to be studied as whole a table published in the last Abstract o aIS Ti „ rpce nt command attention. The details are given in an article on trend of interest rates in New Zealand, and, in en l e , tion, it is interesting to notice that the tendency for rates to harde —reported from Australia some months ago—is apparent h . movement is slight, but in September the average yield on Gov ment stocks was £3 17s per cent, against £3 13s lid m, 1934 This raav be taken to indicate a better demand for money, but u is enlarged scope for the investment of trust funds Governme issues are certain to be in steady demand.

The particulars relating to interest on mortgages are derived from the new registrations each year, excluding those given to Hi State Advances Office and the Rural Intermediate Credit Board They show that the average interest rate fell froin 6.46 in - to 5.06 in the year ended March 31, 1935. The majoi move followed the passing of the Adjustment Act in 1932 and the results are remarkable. In 1931 the mortgages registered bearing interest exceeding 6 per cent, totalled £11,396,829. Last year this total, had dwindled to £596,914. On a percentage basis the mortgages canjing over 6 per cent, fell from 49.2 in 1931 to 6.4 last year. Mortgages with interest between five and six per cent, in the same period fell from £10,458,646 to £2,014,969, and the percentage of the total registrations from 45.1 to 21.5 per cent.

On the other hand mortgages with interest from four to five per cent, increased from £1,274,618 to £5,765,683, and the percentage of this class rose from 5.5 to 61.5. It is evident that these figures include the bulk of the private adjustments made and the renewal ot mortgages on a lower basis. In the same period mortgages wi interest not exceeding 4 per cent, advanced from £42,871 to £995,255, and probably these figures include many renewals where those Renting the money were anxious to keep it invested in good securities.

The movements in the five years show that whereas m 193 ®" the mortgages with interest exceeding 5 per cent, accounted foi of the total registrations, in 1934-35 they were only 27.9. At the same time registrations with interest not exceeding 5 per cent, rose from 5.7 to 72.1 of the total. The figures, as we have said, constitute a valuable chart of the course of adjustment during the years of depression. They will have to be accompanied by other data before the whole effects can be correctly assessed but they are of value as showing how, in this important branch of finance, and dealing with one of the economic factors usually extremely hard to move, reductions were effected that must have been of material assistance to the borrowers.