JN now offering rates as low as 9.8%
Published:Wednesday | July 27, 2011 | 12:00 AM
Market leader Jamaica National Building Society (JNBS) has introduced new mortgage products, one of which it says is intended to reward savers with the first single-digit rate from a private mortgage lender.
The new offer will allow existing mortgagors and new applicants to access rates ranging from 11.49 to a minimum of 9.8 per cent for "applicants who have demonstrated a pattern of savings or the ability to save".
Applicants will be expected to have at least 10 per cent of a combined gross salary in a savings account.
JN's mortgage officers were unavailable to state the amounts available at the lower rate, or if there would be a ceiling on mortgages sought in this category.
But the rate now stands the lowest in the market below Victoria Mutual Building Society, the second-largest player with a portfolio of J$29 billion, which reduced its rates effective June 1 to 10.4 per cent for savers, and 11.99 per cent for non-savers. JN, the largest player in the local mortgage market, has a loan portfolio of J$40 billion or 47 per cent share, according to central bank data to March 2011.
Scotia Jamaica Building Society, which has 9-10 per cent of the mortgage-loan market, cut its lending rate on May 1 for new homeowners from 14 per cent to 10.75 per cent fixed for 36 months, but only to a select group of professionals and university students.
Leon Mitchell, assistant general manager, marketing and promotions, at JNBS, said in a company-issued release that single-digit loan rate is a consequence of competition in the mortgage market.
Mitchell hinted that he expects the lower rate to stimulate demand for loans. He said the revised rates followed examination of JN's "portfolio, the state of the economy and people's lifestyles".
JN said loans would also be available for solar power conversion and incomplete construction projects, but did not say what rate or terms would be applicable to these categories.