Jamaican gov’t cuts interest rates on all new, existing NHT loans
As part of the Government’s stimulus
package to minimise the effects of the novel coronavirus (COVID-19) on the
economy, the National Housing Trust (NHT) has reduced interest rates on all new
loans by one per cent, and on all existing loans by 0.5 per cent, effective
April 1, 2020.
This will benefit some 8,000 new mortgagors
annually, and some 100,000 existing mortgagors.
Prime Minister Andrew Holness made the
announcement during his contribution to the 2020/21 Budget Debate in the House
of Representatives, on Thursday (March 19).
In addition, the NHT has put in place
special relief for mortgagors who may lose their jobs as a result of COVID-19.
These measures are to safeguard persons from losing their homes while improving
their disposable income.
As a result, effective immediately,
mortgagors who are laid off can apply for a moratorium on all loan payments of
three months in the first instance.
“In February 2020, 11,350 mortgage accounts
valued at $18.3 billion were in arrears for 90 days and over. Based on the
NHT’s loan management procedures, recovery activities, including public
auction, were implemented,” the Prime Minister said.
“Effective immediately, the NHT will
provide an option to reschedule these delinquent loans. However, this option
will only be made available where the Trust has not already entered into a
commitment to dispose of the property,” he added.
Holness said mortgagors are, therefore,
encouraged to take advantage of this opportunity, which will be extended for
six months, effective April 1, 2020.
Also, during this period, the NHT will
consider each mortgage on a case-by-case basis, with the option to extend the
tenure of the loan, reduce the interest rate, or some combination.
In addition, mortgagors may also take
advantage of the Intergenerational Loan Facility in their rescheduling
arrangements.
“All mortgagors who may have difficulties
during this period but whose mortgages are not at the delinquency stage, are
being encouraged to make contact with the NHT. We stand ready to assist,” the
Prime Minister said.
Meanwhile, the interest rate discounts
currently offered to special groups, such as mortgagors aged 55 years and over,
the disabled, as well as public sector workers, will continue.
The interest rate discounts for the
disabled will also be extended to include the parents of disabled children,
effective April 1.
There will also be housing benefits for
persons over 65 years who are voluntary contributors.
Holness said currently, individuals over
the age of 65 years are not required to contribute to the Trust and are not
allowed to access housing benefits.
“The NHT Act, however, makes provision for
individuals who would not, ordinarily, be liable to pay contributions, to do so
voluntarily and thereby qualify for benefits,” he stated.
He noted that the NHT Act makes provision
for individuals or groups to be classified as voluntary contributors.
“Contributors aged 65 years and over, will
be designated as voluntary contributors and, therefore, be able to access
housing benefits with tenure extending up to age 70,” the Prime Minister
pointed out.
He also cited the Intergenerational
Mortgage Programme, which was implemented in financial year 2019/20 and was
geared at eligible applicants for NHT scheme solutions.
Holness informed the Lower House that the
first beneficiaries of the Programme received their solutions in the Darliston
and Shrewsbury Housing Schemes, in Westmoreland.
“Beginning April 1, 2020, the NHT will
extend this benefit for eligible applicants for other loan products, such as
open market purchases and construction loans. Funding under this Programme will
be capped at the prevailing loan limit,” he noted.