Home loan market too hot for Public Trust
The Public Trust, which has had some of the sharpest home loan rates this year, has decided to exit the home loan business as it's too competitive.
Tuesday, December 18th 2012, 5:09PM
Despite having good rates The Public Trust, which is a state-owned enterprise, has struggled to compete in the market where banks are highly active and aggressively under-cutting their carded rates.
A spokesman also said that home lending isn't a core business for the organisation. It's key business is aroound trusts, estates and wills. People don't think of the Public Trust when it comes to residential lending, he said.
"It's not a market we want to be in."
The Public Trust had used mortgage brokers as part of its distribution network and it will continue to accept new loan applications up to December 31.
Its residential home loan book sits at around $195 million as at June 30.
Currently it will continue to manage that book and no decision has been made about whether or not to sell it. It funded its home loans from investments in its Common Fund. Again no decision has been made about what it will do with deposits coming into the fund.
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