The National Housing Trust (NHT), state housing developer, indicates that its move within the last year to reduce interest rates has further increased affordability for Jamaicans applying for housing loans.

Specifically, applicants who earn up to $10,000 weekly will now be able to access loans of maximum value $4.4 million compared to $3.1 million before.Additionally, minimum wage earners who previously were limited to a maximum housing loan of $2.9 million can now access up to $4.8 million.For Jamaicans earning $12,000 weekly and over, a maximum $5.5 million can be drawn on.Loans greater than $4.5 million and not exceeding $5.5 million are granted by the NHT to build a house or to purchase a new housing unit.The new housing unit must be one in a housing development whose completion certificate is dated after September 1, 2015.Therefore, Jamaicans buying an older property can access no more than $4.5 million, regardless of income.“The reduction in interest rates was intended to improve the affordability of contributors with improvements according to the income band,” the Trust said in response to queries made by the

Jamaica Observer.“Policy changes made over the last three years have increased affordability and improved access to housing for NHT beneficiaries. Demand levels have remained fairly constant for NHT-financed mortgage loans despite slow growth in real income levels,” the Trust stated in a response sent through its communications department. The current interest rate bands are zero per cent for workers earning between minimum wage and $12,000 weekly; two per cent per annum for workers earning between $12,000 and $20,000 weekly; four per cent for those earning between $20,000 to $30,000 weekly; and finally, six per cent for workers earning more than $30,000 weekly.Home buyers needing more than $5.5 million for home purchase will have to seek additional funds from a private mortgage provider.The Trust said it facilitates joint-finance mortgage transactions (combined) and pari passu mortgages. “Using any of these facilities, new applicants may benefit from their NHT loans at the applicable rates, and additional funds from partners,” it was noted.Assuming an age of 30 (mortgage calculations vary according to age), the repayment rate on $4.5 million for workers earning $12,000 weekly (zero interest) is $12,902.22 monthly. If they borrow up to $5.5 million, the monthly repayment is $15,404.72.For those paying two per cent interest (because they earn between $12,000 and $20,000 weekly), the payment on $4.5 million is $17,414.80 monthly. If they borrowed $5.5 million, the monthly payment would be $20,920.10.Also assuming an age of 30, in the four per cent income band (with earnings between $20,000 and $30,000), the payment on $4.5 million is $22,938.07. If a contributor borrowed $5.5 million, the monthly payment would be $27,670.76.In the six per cent income band (earning above $30,000 weekly), the payment on $4.5 million is $29,316.75. If they borrowed $5.5 million, the monthly payment would be $35,466.92.