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Ex-Service Men (Mortgage Interest)

Volume 155: debated on Wednesday 14 June 1922

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asked the Minister of Health whether municipal corporations are allowed to charge £2 per cent. in case of monthly repayments and £5 per cent. in the case of weekly repayments for administrative charges on mortgages granted to ex-soldiers who have purchased houses under municipal housing schemes; and whether, in view of the reduction in the bank rate, consideration can now be given to ex-soldiers for the reduction of interest on mortgages from 6½ to 5½ per cent.?

In the case of houses sold on mortgage payable by monthly or weekly instalments, local authorities, with my approval, may make a charge (to cover administrative expenses) equivalent to 2 per cent. of the instalments for monthly instalments and 5 per cent. for weekly instalments. In the case of a purchase over 20 years by monthly instalments, the charge would amount to 3s. 8d. per cent. per annum of the capital. In view of the fall in the rates of interest for new loans, I have already agreed that the rate of interest on mortgages in respect of sales effected since the 1st April may be calculated at 5½ per cent. per annum.