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Mortgage lenders highlight effective interest rate at expo

May 07. 2015
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As home loans remain a highlight of the 15th "Money Expo", several banks have adjusted their tactics by promoting attractive effective interest rates (EIR).

The Government Savings Bank is offering zero interest for the first 10 months of a mortgage to the first 20 borrowers on each day of the expo, and these borrowers will enjoy an EIR of 5.8 per cent per annum.

Government Housing Bank, meanwhile, offers zero interest for the first six months and 3 per cent for the seventh through 12th months. These customers will enjoy an EIR of 4.23 per cent per annum throughout the lending contract.

Money Expo 2015 opened yesterday at Impact Muang Thong Thani and runs until Sunday.

TMB Bank offers the lowest EIR at the expo at 5.15 per cent per annum throughout the mortgage contract. In the first three years, TMB offers a 3.99-per-cent interest rate and minimum retail rate (MRR) minus 2.275 per cent from the fourth year onward.

The bank also offers free fire insurance and free housing assessment.

Krungsri (Bank of Ayudhya) offers 0.50 per cent for the first six months and 0.25 per cent for the first six months for borrowers who buy mortgage-reducing term assurance (MRTA) at the fair. It also offers an EIR of 5.49 per cent for borrowers who choose the first type of lending and 5.44 per cent for the second type.

Bangkok Bank offers an EIR of 5.65-5.85 per cent per annum throughout the lending contract and a special interest rate of 1.75 per cent for the first year. Kasikornbank offers a special rate of 0.99 per cent for the first eight months and EIR of 5.94 per cent per annum.

Siam Commercial Bank, the largest mortgage lender among the commercial banks, offers the highest EIR at 7.74 per cent per annum. However, SCB offers a special rate at the expo of 4.75 per cent for the first year and MRR-0.50 per cent or 7.60 per cent per annum for the second year.

Bangkok Bank senior vice president Pimonporn Poolnapol said the bank had never offered zero-interest packages for housing loans at the Money Expo but it had attempted to show the EIR, as this is what borrowers actually pay to the financial institutions.

She said the bank hoped that the expo would help boost its mortgage lending as it had missed its first-quarter target in this segment.

"Several borrowers have delayed housing transfers, saying they wanted to wait and see the interest rates after the [Bank of Thailand’s] policy-rate cut," she said.

BBL might lower its target for new housing loans from the previous Bt70 billion to cope with the actual situation. Last year, the bank booked new housing loans of Bt60 billion.

Alongkot Boonmasuk, head of housing loan product management and marketing at KBank, said the bank was cutting its new-mortgage target from the previous Bt50 billion after seeing new loans of only Bt10 billion in the first three months.

Yol Pokasub, president of SCB, said its mortgage lending had enjoyed impressive growth in the first three months as most of its borrowers were buyers of high-end residential projects. Its outstanding housing loans are around Bt500 billion.

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