They now account for forty per cent of sales. Is it really worth it? JOHN HUSBAND YOUR MONEY DO you want the best possible return on your savings? Even if it means home-buyers paying more for their mortgages? The Skipton building society, Britain's 14th biggest, has just raised its home-loan charges to pay better mortgage rates to savers. Its new rates beat those of most major building societies.
Its 90-day notice account, for example, now offers 8.8 per cent on $5,000 rising to 10.75 per cent on $50,000. The big worry now is: how many other societies might follow suit. If the bigger societies feel their savings are threatened they would raise their mortgage rates to compete. The slump leaves the Government strapped for cash forcing National Savings to compete aggressively for money. The new Savings Certificate, for example, due out Monday week, offers a guaranteed 7.5 per cent tax free, worth the equivalent of 12.5 per cent to a top tax payer. A rate no building society can match.
So if savers are determined to ignore their consciences and chase the best possible returns, mortgage rates must remain under pressure. Unless and until the Government gives a lead by bringing down interest rates generally.
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