Approval granted to NBS by Senior Finance Minister for increase in mortgage ceiling
–persons can now borrow up to $15M
-NBS also announces decreased interest rates
As part of the implementation process of some of the Budget 2021 measures, Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh handed over the approval for an increased mortgage ceiling to Chairman of the New Building Society Limited (NBS), Floyd McDonald. With this approval, the mortgage ceiling for the financial institution now moves to $15 Million up from $12 Million, allowing for persons to acquire mortgages up to this higher amount.
The handing over took place during a simple ceremony in the eastern conference room of the Arthur Chung Conference room today in the presence of the media, other officials of the NBS and both Senior and Junior Ministers of the Ministry of Housing and Water.
“President Irfaan Ali’s Government has repeated and reiterated, since our assumption of office, our firm conviction that home ownership is perhaps the single most important achievement for almost every family, and that acquiring one’s own home will perhaps for many of us be the single most important investment we would make in our entire lives,” Minister Singh noted.
Minister Singh reiterated, “Our commitment to promoting and facilitating home ownership is because we recognize how important home ownership is to the individual family, but we also recognize how important home ownership and home construction and construction activities are to the economy as a whole…the generation and creation of jobs, the generation of income …the improvement of livelihoods.”
The Senior Finance Minister, while lauding the NBS for the important part they play in the facilitation of home loans, reminded that the Society has come a long way in terms of their loan offers to the public, recalling that in 1991, NBS granted only 125 new loans while by 2014 the Society had granted 896 new loans, having achieved an all-time high of 1,234 in 2012. Unfortunately, over the past five years, the number of new loans granted annually fell sharply to 400 by 2020. He added that in 1992, the NBS was offering loans at a rate of 18 percent per annum reflecting the state of the economy and the financial sector at the time, but that since then favourable government policies had facilitated a steady reduction of interest rates to the point where today the NBS is able to offer its low income loans at 4 percent.
Meanwhile, Minister of Housing and Water Collin Croal said that the 2021 Budget measures are expected to significantly boost the housing sector.
“This signals from Government’s perspective our deep underlying intention of ensuring we bring greater relief to our home owners, potential borrowers but also… walking the walk,” Minister Croal added.
He noted that more persons would be able to access financing for home loans as well as be able to afford to build their homes with more choices available in terms of types of homes to be constructed as he alluded to the other budgetary measures that would assist in this regard, especially the reduction of duty and zero-rating of specific construction material. He posited that with the increase in the loan ceiling, it will not only allow for Government to achieve its overall goal of distributing 50,000 house lots but also encourage home ownership.
Also speaking at the ceremony was Chairman of the NBS Mr. Floyd McDonald who expressed NBS’ pleasure at receiving the approval since as part of its corporate social responsibility, the NBS could now offer further reduced interest rates to borrowers. In this vein, the Chairman announced that NBS will now offer loans up to $6M at a rate of 4 percent per annum reduced from 4.25 %. As regards to loans between $6M to $12M the interest rate will now be 5.95% down from 6.15 and 6.75% while loans above $12M up to $15 M will be offered at a rate of 6.25% per annum.
“The Society is indeed appreciative of the improved ceiling approved by Government. We know that our collective efforts will redound to an improved standard of living for Guyanese,” the NBS Chairman added.
On handing over the approval to the NBS Chairman, Minister Singh congratulated NBS on its decision to reduce interest rates for prospective borrowers as well as the remarkable role played by NBS over the years to facilitate home ownership countrywide.