Sagicor joins mortgage fray
Published:Sunday | June 26, 2011 | 12:00 AM
Avia Collinder, Business Reporter
Sagicor Life Jamaica, looking for an advantage in a re-energised mortgage market, has cut interest rates by one of the largest margins yet, ranging between two and six percentage points or an average of 21 percentage .
The insurance group, which operates a property-services arm, has launched a marketing campaign around the initiative, noting that cuts affect all loan categories.
For residential or owner-occupied loans, the interest rate applicable on loans is now 12.95 per cent, moving from 14.95 per cent. For refinanced and investment property, the rate is now 13.95 per cent, moving from 18 per cent. For commercial property the new rate is 15.95 per cent, moving from 22 per cent. For a category classified as commercial and equity loans, the applicable rate is 15.95 per cent, down from 20 per cent.
The insurance company said, however, that there were no wholesale adjustments to existing mortgage accounts.
"We offer variable rate mortgages, which gives us the right to adjust rates," said Tanya Miller, vice-president of group marketing at Sagicor.
"However, we generally keep rates steady, even when rates are climbing, to facilitate our customers in planning for repayments."
Meanwhile, local realtors say the rates are the lowest they have been for mortgages for the last half decade.
Still, while noting the reduction in the cost of loans, brokers say buyers are facing higher home prices as construction costs increase, and may still be shy of investing.
Edwin Wint, immediate past president of the RealtorsAssociation of Jamaica and CEO of La Maison Property Services, said Monday that bargains might nevertheless be available among foreclosed properties, adding text those investments would pay off over time as property values reappreciated.
More choices
"There are opportunities in the private-treaty market for foreclosed properties, and the increased investment in lower-income housing has offered more choices in that market segment," he said.
"The time to invest in real estate is now before the seller's market is back in full swing."
Miller declined to state the size of Sagicor's mortgage portfolio.
"We have a fair share of the market and are looking to grow," she said.
The mortgage-loan market, that is, within the segment regulated by the Bank of Jamaica, was valued at about J$86 billion last year. Sagicor, as an insurance company, is regulated by the Financial Services Commission, which does not disclose data at the depth published by the central bank.
Miller says three persons are eligible to seek loans from Sagicor as joint applicants either through a joint-finance mortgage or straight-mortgage financing. The company, she added, continues its policy of suspending principal payments for the first few years of the mortgage.
Residential mortgages are available for financing up to 85 per cent of the cost, purchase price, or appraised market value of the property, whichever is the lowest.
Sagicor mortgages are for a period of up to 30 years, or to age 70, whichever is earlier, for properties constructed substantially of concrete blocks.
For properties constructed of hardwoods, the maximum term of the mortgage would be 20 years. The minimum term of any Sagicor mortgage is five years.