Interest rate cut for people with Homeswest and Keystart home loans

13/11/96

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

Mr Kierath said more than 13,000 borrowers would benefit from the reduction in the maximum variable interest rate to 8.75 per cent per annum.

The current rate for most Homeswest and Keystart home loans was 9.5 per cent.

Mr Kierath said the reduction, effective from December 16, for Homeswest and Keystart rates followed a cut of 0.5 per cent in official rates by the Reserve Bank.

"This is an important drop in the rate for Homeswest borrowers because it means they are paying the same rate as Australia's biggest bank, the National Australia Bank," 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 $46 per month on a $90,000 loan.

"In the past when Homeswest has cut interest rates, some borrowers have seen the benefit of making extra payments and 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 is designed for those people who have difficulty in obtaining finance from the private sector," he said.

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

Mr Kierath said 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.

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

Homeswest offers programs that target 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."

Media contact: Steve Manchee 481 2133