– Lower interest rates, requirements crucial to ownership agenda

WITH the government recently securing an agreement with local banks for the reduction of interest rates on homes below $9M and removal of the down-payment requirement for mortgages and home-construction loans, the banks have expressed their eagerness to bring the dream of homeownership to life for many Guyanese.

Marketing Officer at Citizens Bank, Mikhail McKenzie, told the Chronicle that since the International Building Expo started on Friday, over 250 persons have expressed interest in starting their loan process to finance the construction of their homes.

He noted that these persons represent just persons visiting the bank’s official booth at the expo, explaining that the number could be higher if taken into account those persons who opted to visit one of the bank’s offices to have their process started.

According to McKenzie, prior to the government’s initiative, which is set to see a reduction in the interest rates on loans of up to $9M to 3.8 per cent, Citizen’s Bank’s interest rates stood at 3.95 for up to $7 million.

McKenzie opined that the recent collaboration between the government and the local banks had motivated a large section of the population to begin their process.

He noted that about 75 per cent of the persons starting the process for a loan were first-time land and homeowners.

“Reducing the interest rate to 3.8 you know, puts more persons in a better position to be able to get financing, also in a better position to be able to repay, right,” he said.

Speaking about removing the percentage requirement, McKenzie noted that he believes the initiative will play a pivotal role in ensuring a wider demographic can move forward with their plans for construction and home ownership.

He noted that he believes the initiative comes at an opportune moment as the bank moves forward with an initiative catered to promoting home ownership.

“Homeownership, as much as it is, as we say a dream, we want it to be realized, but it is still expensive to many people. It comes into a perfect time because we have our ‘my time’ or mortgage where we have reduced our rates across the board. So, not only persons on a low income can benefit, but also residential mortgages,” McKenzie said.

Republic Bank Guyana Marketing official attached to the Small and Medium Business segment, Alison Barkoy disclosed that the interest rate at the bank was 4 per cent on $7 million, and 5.7 per cent on loans from $7 million to $10 million, this shows a significant reduction.

At the five-day Building Expo, the bank provided an additional reduction giving persons who started their loan applications at the expo the reduced rate of 3.75 per cent on loans $7 million and under.

She noted that the bank saw significant interest from persons eager to start the process to access a home-ownership loan or mortgage from the bank, including persons who received their house lots over the weekend.

“There are others who would have only recently collected the title or agreement of sales at the expo. And some may have already, from what we would have seen, had a plan done because they knew what they would get. So, they’re all thinking ahead. So, they got that, and they’re coming in to get the information. We have done quite a number of applications that our branches will follow through on,” Barkoy stated.

Christina Correia, Marketing Manager of Demerara Bank, stated that she believes the initiative will be a game changer for local home ownership, noting her company’s commitment to assisting Guyanese achieve this massive milestone of owning their own homes.

She explained that Demerara Bank decided to take part in the initiative because it believes it is crucial to make finance and access to home loans affordable.

Correia disclosed that in keeping with the bank’s commitment to this massive sector, the bank had implemented several other initiatives catering to homeowners.
The initiatives by the bank include the waiving of processing fees, site-inspection fees, and a 50 per cent reduction in attorneys’ fees.

“We’re offering additional bonuses, and therefore we’re waiving processing fees. We’re waiving site-inspection fees and we’re offering the customers 50% off their attorney fees. So all of these things come together, and they add up, especially for homeowners first-time homeowners, they add up, and you know, we’re happy to support the initiative and we’re happy to be part of this initiative.”

Before the agreement with the government, Demerara Bank was offering 4 per cent interest on $ 4 million loans; and 5.95 on loans over $ 4 million.

She disclosed that with this new agreement, the bank intends to see a high percentage of new loan applications and clients, especially considering the other incentives targeted to homeowners at the financial institution.

“Our interest is being calculated on reducing balance and therefore, each month you pay installments, your balance is reduced and therefore, interest is calculated on that reduced balance at our bank. And we extend a term of 25 years to that customer, they can repay that loan in 20 years, 15 years, 10 years, and there is no penalty for early repayment.”

GBTI’s Marketing and Communications Officer, Nadia De Abreu, called home ownership the “single best investment” an individual could make, noting that the bank is committed to seeing people achieve this goal.

She noted that during the Expo, the bank has seen a massive turnout of people eager to take advantage of the new incentives that would promote affordable home ownership.

“The homeowner would find it easier because a lot of times, even though you may have been allocated the land, it’s difficult for the ordinary person to find that contribution. We have been asking for as low as 5 per cent,other banks have been asking for 20 per cent, you know, as much as 20 per cent; so it’s definitely a welcoming initiative, and we believe that it is going to help us to help more persons to own their own homes,” she said.

According to De Abreu, GBTI has been committed to promoting affordable home financing. She noted that before the agreement with the government, the bank had recently introduced a reduction in its previous loan interest, lowering its rates to 3.99 percent in June 2022.

“The bank believes that home ownership or investing in your own home is, you know, one of the single best investments you could make. And the easier it is for someone to do that helps the cause. So, if we were able to be part of that process, we welcome the initiative by the announcement by the President. We believe it’s going to make homeownership easier for the ordinary man.”