GH Bank's cheap loans a success
Board soon to decide on increasing overall amount
Potential mortgage borrowers lined up for the government's 10 billion baht in cheap loans at all branches of state-owned GH Bank yesterday, the first day of the scheme.
Some 2,000 borrowers applied for a combined 2.5 billion baht in housing loans, averaging 1.25 million each, at the bank's 95 branches nationwide, president Angkana Chaimanat said, adding that the average credit line for the loans was higher than for the bank's general loans at 800,000 baht.
She said raising the cap of debt-servicing for borrowers under the property stimulus to 40-50% of income from the normal 33% enabled borrowers to seek higher loans.
Under the scheme, which is designed to help buyers of homes valued 3 million baht or less to gain better access to mortgages, the state-owned housing bank is allowed to offer loans of up to 3 million baht to those with monthly incomes of 30,000 baht.
Normally, only those earning 54,000 baht a month are eligible for the 3-million-baht housing loans.
Those earning 10,000 baht a month can borrow up to 1 million baht under the scheme. They must pay 5,000 baht a month in the first year, 5,700 in the second and 7,000 from the third onwards.
GH Bank also charges borrowers 3.5% for the first year, 4.25% for the second year and the minimum retail rate minus 0.7 percentage points throughout the term of the loan for general borrowers and MRR minus one percentage point for employees of companies that have been offered special conditions by GH Bank. Its MRR currently stands at 6.75%.
Other measures include cuts in transfer and mortgage fees to 0.01% for six months for homes priced at no more than 3 million baht and allowing first-time homebuyers paying for a residence priced at 3 million or less by the end of next year to deduct 20% of the home's value from taxable income over a five-year period.
Mrs Angkana estimates borrowers' applications for the loans will average 1 billion baht a day after that.
Given the strong demand, the GH Bank board will meet in the next couple of weeks to consider adding to the 10-billion-baht loan fund, she said.
The bank stands ready to raise the amount thanks to excess liquidity of 70 billion baht, Mrs Angkana added.