As the housing sector continues to rapidly develop with the onset of new house lots and homes, the banking sector is following suit, providing more housing loans, according to President Dr Irfaan Ali.
Ali made this remark on Thursday during the opening ceremony of the International Building Expo 2023 at the National Stadium at Providence, East Bank Demerara (EBD).
Comparing the period of 2015-2019 under the former APNU/AFC Government to that of 2020-2023 under his administration, the Head of State explained that there has been a 41.25 per cent growth in lending for home ownership and house construction over the past three years.
“This occurred because of very deliberate strategies by the Government to ensure that we reduce the cost of home ownership and we bring down the cost of borrowing,” Ali said.
“So, over the years, we have been able to increase the incentives to the banking sector to support lending to the housing sector. For example, the interest rate in 2020 for low-income housing was about 6 per cent. Today, because of the incentives and the policies we have implemented, that interest rate is between 3 and 3.75 per cent,” he added.
In fact, over these past two months, several banks have implemented promotions aimed at easing the process of home ownership for customers.
Running until Sunday, Demerara Bank Limited’s (DBL’s) ‘A Loan That Brings You Home’ promotion allows customers submitting and obtaining loan approvals to enjoy several benefits, including waiver of processing fees, 50 per cent waiver of attorney fees, waiver of site inspection fees, competitive equity contribution, and no anticipatory interest on principal payments.
Meanwhile, last month, GBTI launched its “Dream Big – We’ll Take Care of The Rest” promotion, offering reduced interest rates to aid persons seeking financial assistance to buy, build, or complete their new homes; or for persons wishing to renovate their homes.
And Citizens Bank is running its “My Time Home Mortgage” promotion until October 31, offering prospective homeowners the chance to benefit from interest rates as low as 3.5 per cent, reduced loan fees, insurance premiums, and a maximum of 30 years to repay.
Mortgage Relief
Introduced in 2013 under the previous PPP/C administration, the Mortgage Interest Relief Programme was one aimed at reducing the amount of interest paid by a homeowner on their mortgage.
This programme, Ali noted, has been particularly successful over the last few years.
“If you look at the benefits from the Mortgage Interest Relief Programme – in five years, the total benefit to the population was less than $1 billion. In the last three years alone, more than $2.4 billion went back as mortgage interest relief to the people of Guyana,” Ali said.
In another measure to aid homeowners, Ali noted that the Government has made efforts to subsidise the costs of the house lots, allocating low-income house lots at a subsidy of almost 97 per cent, low-middle income house lots at a subsidy of 75 per cent, and middle-income and young professional house lots at a subsidy of 65 per cent.
Meanwhile, the steel and cement subsidy programme aids residents to kickstart their construction process, having emerged after a realisation that several house lots were left empty after their allocation, due to their owners’ inability to start building right away.
“When you look at a subsidy that we give for steel and cement, we have processed more than 95 per cent of all the applications we receive. We have already allocated 75 per cent of all those who are approved,” Ali said.
