NCB enters mortgage market, JN counters with 9.4% special rate
Published:Friday | March 9, 2012 | 12:00 AM
Avia Collinder, Business Writer
The National Commercial Bank Jamaica (NCB) has launched a mortgage product offered at a new low price of 9.5 per cent.
It comes with an introductory cashback incentive of J$200,000 if mortgage applications reach the bank by August 31.
The offer on Monday marks the banking group's first foray into the multibillion-dollar mortgage loan sector dominated by Jamaica National Building Society.
Indeed, JNBS immediately eclipsed the NCB offer with a special of 9.4 per cent, setting a new low for mortgage rates. That offer has a short shelf life of two months, ending April 30.
NCB says it will lend between J$1 million and J$40 million to homebuyers and up to J$30 million to purchasers of investment property.
Financing is capped at 90 per cent of the property price, and borrowers will get up to 30 years to pay off the mortgage.
Audrey Tugwell-Henry, senior general manager of NCB's retail banking division, said Monday that the new product is designed "to give more Jamaicans access to a loan that would allow them lower monthly payments, ease of access to funds and most importantly, peace of mind."
The NCB mortgage can also be combined with National Housing Trust funds.
Portfolios improved
NCB's chief rival, Scotia Group Jamaica, improved its mortgage loan portfolio by J$2.68 billion in 2011 through subsidiary Scotia Jamaica Building Society (SJBS). Its loan portfolio is now valued at J$10 billion.
Market leader JNBS, which manages a loan portfolio of J$41 billion, was previously offering rates of 11.49 per cent to a low of 9.8 per cent, the latter being for applicants who have at least 10 per cent of combined gross salary in a JNBS savings account.
Its 9.4 per cent mortgage special is for residential properties only. It too offers a cash incentive.
"We will make a J$50,000 contribution towards JN mortgage closing costs," said JN executive for group marketing, sales and promotions, Jean Look Tong.
Qualified applicants also get free membership to the Jamaica Automobile Association for a year. JAA is a JN subsidiary which provides roadside assistance to motorists.
The sliding mortgage rates comes against the background of real estate listings of new developments searching for homebuyers, among them Harbour Village being developed by Gore Homes; Florence Hall by the same developer whose units are selling for J$7.85 million; Caymanas Estates by New Era for J$11.5 million to $13 million per unit; and Somerset Homes town houses in Kingston by WIHCON.
The number of mortgages written in 2011 improved by 2.5 per cent, from 11,834 to 12,138. The value of mortgage loans written climbed by 15.11 per cent over the year prior, reflecting larger individual loans, based on National Land Agency (NLA) data.
NLA said some $68.47 billion in new mortgages were written for calendar year 2011, compared to J$58.10 billion in 2010 for both public and private lenders.
Other late rates in the market, include Broadcast and Allied credit union which cut its rate to 9.9 per cent in January; GSB Credit Union, 9.58 per cent since September 2011; Victoria Mutual Building Society reduced its rates to 10.4 per cent for savers, and 11.99 per cent for non-savers on June 1, 2011.
Scotia Jamaica Building Society 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 defined group of professionals and university students.
State-owned NHT continues to offer the cheapest loans priced at one to seven per cent for loans capped at J$4.5 million. The Trust's mortgage portfolio was valued at J$98.9 billion with some 93,000 accounts up to January 2012.
Jamaica's four building societies had a combined loan portfolio of J$87 billion at September 2011, the most current central bank data on the industry.