Page 3646 - Week 12 - Thursday, 19 September 1991
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the Housing Trust calculates interest on the balance at the end of the month - the mortgage documents require mortgagors to make monthly loan repayments by the end of each month.
If mortgagors make fortnightly payments equal to half their monthly payments, they would make an extra months payment each year - 26 instead of 24 half month payments. These extra payments reduce the loan balance and therefore the interest charged over the life of the loan. Commissioner for Housing mortgagors can make arrangements to pay 26 half monthly payments.
Therefore the benefits mortgagors achieve through making fortnightly loan repayments results from the additional payments they make rather than the frequency of their payments. In addressing this question, I should also advise the Assembly that:
loans issued by the Commissioner for Housing have been designed to assist the low to moderate income earners achieve home ownership earlier - the loans therefore have advantages that are not available through traditional mortgage lenders (eg subsidies on deferred payments); as mortgagor incomes improve, they can increase their monthly payments and make ad hoc lump sum payments against their loans - this will reduce the terms of their loans and therefore their total interest bill; and the ACT Housing Trust is presently examining proposals for a new loan accounting system which will improve the services delivered to its mortgage clients.
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