Variable rate mortgage tried in N.Y.

Variable rate mortgages are finally making their way to New York City. Such mortgages have been offered for some time in California and other parts of the country. But they were not permitted in New York State until Congress passed legislation enabling the Federal Home Loan Bank Board to pass regulations allowing state-chartered savings and loans to supersede their individual state's usuary laws by offering variable rate and other types of mortgages.

The Dime Savings Bank, the city's second largest savings bank with assets of that begins at 12 percent, plus two points. A point is 1 percent of the original amount of the loan. By way of comparison, conventional mortgages in New York City are currently being offered at 14 percent, plus points.

Like other variable mortgage rates, the rate can increase or decrease in response to an index, which is calculated by the Federal Home Loan Bank Board. Increases or decreases are not allowed to exceed 1 percent per year or 5 percent over the life of the mortgage.

Dime decided to offer the variable rate mortgage after successfully marketing in June a five-year renegotiable rate mortgage.