The area's largest savings and loan association, Perpetual, has written approximately 1,500 home-owners offering to allow them to pay off their mortgages at discounts ranging from 10 to 20 percent.

What the offer does for Perpetual is allow it to get back money it lent at interest rates of 9 percent or lower to lend again at higher, prevailing rates. Mortgage rates in the area are currently at about 12 percent.

Savings and loans, hit in recent months by a loss of deposits lured away by higher interest rates elsewhere, have found themselves with less money to lend than in the past.

For the mortgage-holder, besides the discount, the offer allows a homeowner to remove one more debt hanging over his or her head. However, paying off a mortgage also means the loss of the tax deduction for interest payments.

"There are many advantages to paying your loan off at a discount, including the obvious savings on the total amount of your loan, the elimination of your monthly loan payment and the security that owning your home free and clear provides," Perpetual wrote to its customers. "Also, since you have been making loan payments for several years, the interest portion of your payments have (sic) decreased, and the tax benefits you once enjoyed may no longer be as great."

Perpetual President Thomas Owen said that about 500 customers had taken the savings and loan association up on its offer so far. Another 1,500 have expressed an interest in doing so, he said. Perpetual has been making the offer to holders of mortgages with interest rates of 9 percent or below for two or three months, he added.

The 20 percentt discount applies to loans with interest rates 6 percent or less. Loans bearing interest rates of 6.1 to 7 percent may be paid off at a discount of 15 percent. Loans bearing interest rates of 7.1 percent to 8 percent may receive a discount of 12.5 percent, and the others up to 9 percent are discounted by 10 percent.