Wednesday, October 29, 2008

Mortgage interest rates to be cut

Published: Wednesday October 29, 2008

MORTGAGE interest rates are soon coming down.

Central Bank Governor Dr Marion Williams announced yesterday that commercial banks had agreed to drop all lending rates including interest on home construction loans by 0.5 per cent.

The interest rate reduction will also be applied to credit cards and personal loans, she said.

At a Press conference at the Tom Adams Financial Centre to review the economy's January-September performance, Williams said however that people with fixed rate mortgage contracts may have to wait some time see a reduction.

The Governor also disclosed that the last minimum deposit interest reduction which usually leads to a drop in interest on loans, was imposed because borrowers were showing signs of "stress".

The island's lead economist said, "Borrowers are experiencing some stress in meeting their obligations and the reduction in interest rates will help to prevent some of the defaults that are possible.

"We have indications that banks are doing more provisioning [for bad dept] and this is usually an indication that there may be an increase in late payments and so on. We want to stop that from happening."

Source: Nation Newspapers

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