Vol. 497 No. 5
262 Mr. R. Bruton asked the Minister for the Environment and Local Government the interest rate charged on shared ownership or other housing loans issued by local authorities; the additional charges, if any, made for mortgage protection or insurance; the plans, if any, he has to reduce these in 1999 in line with interest rates; and if provision is made in the framing of the Estimates for these changes. [25651/98]
The interest rate on local authority variable rate housing loans is determined by the Housing Finance Agency by reference to rates prevailing in the financial market. The rate is linked generally to building society mortage rates and is at present 6.35 per cent. In addition the cost of mortage protection insurance is 0.67 per cent which is a fixed rate until 30 June 2002. Mortage protection insurance does not apply in the case of house improvement loans.
The agency keeps the interest rate under review in the light of trends in the market and will continue to pass on the benefits of any lower interest rates. No provision is required in the Estimates in respect of changes in interest rates on these loans.
