CHEAPER MONEY

Hokitika Guardian, 8 December 1928, Page 2

CHEAPER MONEY

LOWER MORTGAGE RATES. AUCKLAND SAVINGS RANK’S DECISION. AUCKLAND, Dec. 5. The gradual easing of the niouev market, which has drawn common; from financiers in recent months, tool a more definite turn at a meeting o the trustees of the Auckland .Saving Rank, when it was decided to roduei the bank’s mortgage interest rate am also the rate of interest on deposits The resolutions carried were as fol low:

(1) That the rate of interest on ai mortgages completed on and after flu date he 6 per cent per annum, am that this rate be" : chargeable on al current and overdue- mortgages a from January 1, 1929. (2) That, subject to the consent o. the Governor-General being obtained and the necessary three...months’ nof ice having been given ’in the Gazette, the rate of interest payable to de positors be reduced from 4:J pot cem per annum to per cent per annum as from April Ist next.

For many months past it has hcei recognised that there is a vci.> !mg( surplus of capital in the Dominion seeking investment. Theie have been quite a number of cases, where moiie,' has been loaned at reduced lutes, ano mortgages renewed on a basis mon favourable to the mortgagor. Capitalists. still chary of lending on rural security, in spite of the greatly improved position of the farmer in tin past two seasons, have turned to cit> mortgages, to find the market floodec with money. -Shares have been eugcily [bought up, as one of the feu ie rnaining avenues of investment, until their price has been forced to such a level that the return works out in many cases at a very low rate. The decision oi the Auckland, Savings Bank to reduce the rate of interest on mortgages by i per cent will he regarded as significant of the trend of the general financial situation. \ leading city banker to whom the matter wag referred vas doubtful ahoiit expressing any opinion as to the possibility of financial institutions generally . following the lead of the Auckland Savings Bank. The fact that there remained reluctance to lend on rural security was undeniable. The action of the Auckland Savings Bank, as lie'' interpreted it, was caused by the institution being overloaded with sur-

plus funds, which it found difficult to invest. ’‘There is an abundance of mpney about, but trade has not vet recovered sufficiently to promote further borrowing,” he said. let even although mortgage business was slow, inonev in New Zealand was a good deal cheaper than in Australia, as was evidenced by the fact: that the Melbourne Metropolitan Board o: Words borrowed money at per ceni at the .same time as a small body like the Birkenhead Borough Council secured accommodation at o' per cent.

AUCKLAND AND DUNEDIN.

l)i:NKI)IX. Dec. (k According to a l’ress Association message from Auckland, it was state' that the Auckland. Savings Hank ha' decided to reduce the interest rate m mortgages from fit to fi per cent, the applying to current mortgages iron H,Hilary Ist next, and to reduce tie interest rate to depositors from 4 : i t< 4,1. per cent as from April Ist next The Dunedin Savings Hank has heegetting only fi nor cent on mortgage for the past couple of years, and tha rate still continues. As to the rate o' deposits the Auckland Savings Han) raised it to l;| when tin- commercia banks advanced the rate on fixed de posits to 5 per cent, whereas the Dnn edin Savings 13a,nk has paid -1:1 pe cent for a long time. The Savings liank Act requires tha three months’ notice he given before any change in the rate can take effect and it is understood that up to tin present the trustees here have no considered such a question.