Banks eye well-heeled for home mortgages
At a time when commercial banks are more conservative in approving new mortgages, they are continuing to launch special promotion campaigns to boost housing loans by focusing on people with higher buying power.
Kasikornbank Plc (Kbank) has launched its K-Home Loan Festival, offering a low interest rate of 0.99 per cent and up to 90 per cent of the home’s value to customers who also invest in Pitaksin-Home/Senior insurance policy from now until March 16. This is part of the bank’s attempts to boost its new home loans target to Bt49 billion this year, Kbank executive vice president Thawee Teerasoontornwong said.
He unveiled KBank’s special programme, the "K-Home Loan Festival: More Happiness with K-Home Loan!", which provides opportunities for customers to access home financing at special interest rates. K-Home Loan customers participating in the programme will receive loans of up to 90 per cent of the collateral’s appraised value. Eligible borrowers will be able to choose from four special interest-rate options.
The first is a fixed rate of 0.99 per cent for the first six months and a fixed rate of 1.50 per cent from the 7th to 12th month. The second is a fixed rate of 0.99 per cent for the first six months and a fixed rate of 5.15 per cent from the 7th to the 24th month. The third is a floating rate of minimum retail rate (MRR) minus 7.11 per cent for the first six months, and a floating rate of MRR minus 6 per cent from the 7th to the 12th month. The fourth is a floating rate of MRR minus 7.11 per cent for the first six months and a floating rate of MRR minus 2.75 per cent from the 7th to the 24th month. At the end of each option, the rate of MRR minus 1.25 per cent will be applied until the end of the financing term.
KBank’s MRR is currently 8.10 per cent.
To be eligible to join the "K-Home Loan Festival" programme, customers must apply for a K-Home Loan and register their mortgage with the bank by March 31, and take out a Pitaksin-Home/Senior insurance policy with full coverage of the loan amount for the full term of the loan.
The insurance policy will provide borrowers with mortgage insurance that will indemnify policyholders against unforeseen circumstances that could occur during the loan term. Interested customers have until March 16 to submit their application at any KBank branch across the country.
In 2014, KBank granted Bt48 billion in new home loans, while total outstanding home loans equalled Bt225 billion. The bank’s full-year target in 2015 is to grant Bt49 billion in new home loans and to reach the outstanding home-loan growth of 6-8 per cent.
CIMB Thai Bank has offered a refinance programme – Balance Transfer Refinance Programme – with special interest rate of 4 per cent for the first year and average interest of 4.67 per cent for the first three years. This will provide cost relief to mortgage customers who now pay an average interest rate of 6-7 per cent a year, CIMB Thai Bank executive vice president head for retail loan products, Onanong Udomkantong, said.
She added that under the programme, customers who refinance will get an interest rate of 4 per cent in the first year, while in the second and third years, it will be MRR minus 3 per cent. On average, they will pay an interest rate of 4.67 per cent for the first three years, based on the refinance value of Bt3 million with the payment period of 20 years.
