Further interest rate cut for people with Homeswest/Keystart loans

12/12/96

Housing Minister Graham Kierath today announced another interest rate cut for people with Homeswest and Keystart home loans.

Mr Kierath said some 13,000 borrowers would benefit from the reduction in the maximum variable interest rate to 8.25 per cent.

The cut follows a drop already announced in interest rates to 8.75 per cent due to take effect on December 16.

Mr Kierath said the latest reduction for Homeswest and Keystart loans to 8.25 per cent would come into effect from January 15 and followed a drop of 0.5 percentage points in official rates by the Reserve Bank.

"This is an important move for Homeswest and Keystart borrowers because it means they will be receiving the same rate offered by most of Australia's major banks which have announced impending rate reductions," he said.

"As far as possible, Keystart aims to offer a competitive market rate within the constraints of the cost of funds available to it.

"On normal loans, the reduction announced means borrowers will save about $30 a month on a $90,000 loan.

"In the past, when Homeswest has cut interest rates, some borrowers have chosen to continue payments at the higher level.

"After all, any extra payment helps cut the length of their home loan."

Mr Kierath said the Keystart scheme remained popular with low and moderate income households.

The scheme was designed for those people who had difficulty in obtaining finance from the private sector.

The Minister said demand for Keystart funds remained strong, with 10,500 borrowers currently involved in the scheme.

"The Keystart scheme is a very successful model which has helped thousands of Western Australians into home ownership who otherwise would not have had that opportunity," he said.

"We are very proud of the programs Homeswest has been able to offer Western Australians both with families and looking to start."

The programs assist people who may not otherwise be able to own their own home, like low-income earners, disabled people and Aboriginal people.

"This is part of the Government's plan to help as many people as possible get into their own home without being placed in housing poverty," Mr Kierath said.

Media contact: Steve Manchee 481 2133