Homebuyers are benefiting as lenders in the real estate market are battling it out to offer the most attractive rates in the industry, which insiders say was prompted by Government’s move to adjust stamp duties.

Indeed, building societies across Jamaica have significantly reduced mortgage rates over the last quarter.

Scotia Jamaica Building Society (SJBS) cut mortgage rates by as much as 3.25 points for new homeowners — from 14 per cent to 10.75 per cent — in April. Victoria Mutual Building Society (VMBS) last month reduced its rates by two percentage points on new residential loans for owner occupied properties, moving to 10.40 per cent for savers and 11.99 per cent for non-savers. And now, Jamaica National Building Society (JNBS) will be making the move to drop its rates significantly from the current 13 per cent to single digits, the Business Observer has been reliably informed.

Government in April made stamp duty payable at the nominal rate of $100 when refinancing a mortgage for equal amounts or less, adjusting it from 0.7 per cent of the principal being refinanced, plus a flat fee of $500 for the power of attorney that is included.

Realtor Anya Levy, of Valerie Levy and Associates, said the reform measure made Jamaicans very mobile with their mortgage provider and, as a result, it has put a downward pressure on rates which insiders say are among the lowest in decades.

“The mortgage rates are coming down and the reason why they are coming down is because they have taken off the stamp duties off mortgages,” said Levy.

“People were very much shackled with their mortgage institutions because of the stamp duties; now, anyone can shop around and jump from one institution to another .”

The upshot is that there has been a noticeable pick-up in buying interest, Levy said.

And what’s more is that she is predicting that the National Housing Trust (NHT) will be forced to reduce its rates as well or at least increase its loan ceiling because of the closeness between its rates and the private institutions — the private institutions generally offer more money to borrow.

NHT offers up to $1.5 million per person to purchase land and up to $4.5 million (Non-Homeowner’s Loan Limit) per person to purchase a home, at interest rates of up seven per cent.

“The next person that will make a bold move is NHT,” Levy predicted. “So, NHT will have to either lower the rate and/or lower the rate and increase the loan amount from $4.5 million.”

Peter Reid, VMBS senior vice president and chief operating officer, said competition has played a part in the company’s move to adjust rates but said that the bank’s business model as a “mutual” is more customer-centric than other institutions.

“We’ve been consistently keeping our rates down and it really is in keeping with the philosophy of being a mutual – in other word we are not a stockholder company and the only way to return value to our members is to give them the benefits of lower loan rates and as high as we can, deposit rates,” said Reid.

Added Reid: “The truth of the matter is that you can’t have the highest price in the market and expect to have the largest market share. You have to be competitive on your pricing, so there is always going to be that pressure as well.”