Trusteebank mortgage rate rises to 21.5 p.c.

Press, 13 February 1986, Page 1

Trusteebank mortgage rate rises to 21.5 p.c.

Trusteebank Canterbury yesterday increased its interest rate for new mortgages to 21.5 per cent.

The interest rate on existing mortgages would also rise, said the bank’s general manager, Mr Frank Dickson. A range of new increased deposit rates will also apply at the bank from today. The bank has linked the rise in deposit rates to the need to increase its lending rates.

“The increase in mortgage rates comes after an increase in deposit rates which the bank has found it necessary to pay,” said Mr Dickson. Interest rates on Trusteebank Canterbury mortgages last increased on

October 1 last year, when they rose 2 per cent to 19 per cent. The bank described that increase as a belated cost-recovery exercise. It was not clear yesterday what new rate existing mortgagors can expect to pay. “The bulk of the bank’s existing mortgages will not reach the new rate,”'

said Mr Dickson. The amount of the increase would vary, but information on that was not yet available. Mortgagors would be told by letter by March 31 of the new rates, he said. According to the bank,

its lending rates, including mortgages, are similar to those of other big lenders. Mr Dickson said that the increases in mortgage rates had not seemed to deter borrowers. The bank had held its rates in the hope that the lending rate would fall in the latter part of the last year as was predicted in some quarters. But the interest rate had increased and that had forced the bank to readjust its rates.

Mr Dickson declined to comment when asked whether he had any prediction about the lending rate this year.