Interest rates to stay stable on Keystart mortgages: Premier

22/8/00
Low to medium income earners with Keystart mortgages have been given some good news - the latest 0.25 per cent Reserve Bank interest rate rise will not be passed on.
Premier Richard Court announced today that Keystart, the State Government-backed home loan scheme, would keep its standard variable rate at 8.25 per cent.
Mr Court said that when additional fees charged by most lenders, such as application fees, monthly charges and mortgage insurance, were taken into account, Keystart interest rates were comparable to, and in most cases better than, the standard loans offered by the major banks.
"Keystart is well aware that its borrowers are predominately first home owners, who have already had four interest rate rises in less than six months, and has taken steps to absorb the 0.25 per cent increase this time," he said.
"I am delighted that as a result of its prudential interest rate risk management practices, Keystart has been able to protect its borrowers for the time being.
"By not passing on the interest rate rise, borrowers will save $16.78 per month on an average $100,000 loan.
"Keystart has also refrained from following major banks which increased their interest rates by up to 0.02 per cent to allow for the impact of the Goods and Services Tax."
Mr Court said the Keystart Scheme focused on being a low deposit scheme to assist those who were unable to save a large deposit

Since its inception by the State Housing Commission, the forerunner of the Ministry of Housing in 1989, Keystart has loaned more than $3 billion to more than 35,000 low and moderate income earners who might not have been able to access a loan through other lenders.
"Keystart also has a safety net to assist borrowers who get into difficulties, giving them a far greater degree of flexibility if their circumstances change," the Premier said.
"As well as helping people buy their own homes, Keystart has made a significant contribution to employment in the housing construction industry."
Media contact: Casey Cahill 9222 9475