asked the Minister for the Environment the present mortgage interest rate advertised by building societies and the actual rate; if the actual rate based on a monthly reducer charged by the trustee savings banks for mortgages differs from the actual rate charged by the building societies; the extent of the difference; the difference in the gross cost of a TSB and building society mortgage of £20,000 over a full year; and the reason for any such difference.
Written Answers. - Mortgage Interest Rates.
18.
The interest rate charged by building societies and the Dublin Savings Bank on house purchase loans is 13.15 per cent at present. The difference between repayments to the building societies and to the savings bank arises because mortgage interest is calculated by the societies for the whole year on the amount of capital outstanding at the beginning of the year and is calculated by the savings bank on the amount outstanding at the end of each month. On this basis repayments to a building society in a full year on a house purchase loan of £20,000 at 13.15 per cent would amount to £2,872 and in the case of the savings bank to £2,836.80 — a difference of £35.20. The method used by a building society to calculate interest on its loans is set out in both the rules of the society and in each mortgage contract.