BANKS are increasingly focused on mortgages, reshaping who can get a loan in the Jamaican economy as risks rise in unsecured lending.

For years, household lending in Jamaica was dominated by consumer credit. Bank of Jamaica (BOJ) data show that personal loans were the largest single exposure for deposit-taking institutions in 2019, reflecting a system heavily weighted toward unsecured lending.

Before the pandemic, consumer loans accounted for roughly 60 per cent of household credit, compared with about 40 per cent for mortgages. By 2025, the two segments stood at 50 per cent each — a clear shift in where loans are going across the financial system.

The impact is already visible. Borrowers with property are finding it easier to secure financing, while those without collateral — particularly small businesses and lower-income households — are finding it harder to get approved.

The move has been gradual. Mortgage lending has gained ground over several years, closing a gap that had kept consumer loans well ahead. The turning point came after the pandemic, when housing loans became the main driver of credit growth.

Behind this is a widening gap in loan performance. Data from the BOJ’s 2025 Financial Stability Report show that non-performing loan ratios for consumer credit increased during the year, while mortgage delinquencies declined, highlighting a growing divergence in asset quality.

That gap is pushing banks to put more money into mortgages. Loans backed by property give lenders something to recover if borrowers default. Unsecured loans do not, making them riskier, especially as repayment patterns become more uneven.

As a result, secured lending is taking a larger share of portfolios, even as institutions maintain that their overall strategies have not changed.

Scotiabank, one of the country’s largest lenders, said it has seen “significant growth” in its mortgage portfolio in recent years, driven by demand for home ownership and expanding housing supply.

“Rising property prices have led to an increase in mortgage loan sizes, as clients seek higher financing amounts,” the bank said in e-mailed responses to the Jamaica Observer.

However, it maintained that unsecured lending remains a core part of its offering.

“Unsecured loans remain a key solution for our clients… our appetite for unsecured loans has not changed,” Scotiabank said, adding that it does not see a significant divergence in loan performance within its own portfolio.

The contrast highlights a gap between what banks say and what the data show, a trend reinforced by developments in the housing market.

Residential property prices rose 9.4 per cent in 2025, outpacing income and rental growth. Prices in Kingston and St Andrew increased by 3.6 per cent, while the rest of the island recorded a sharper rise of 13.6 per cent, pointing to stronger demand outside the capital.

At the same time, rental growth has lagged, pushing the price-to-rent ratio to a record 2.1 — a sign that property values are rising faster than the income they generate.

For lenders, higher prices support larger loan sizes, allowing mortgage portfolios to expand even as the number of property transactions declines.

“What is driving price is demand,” said David Levy, director of VLA Realtors and Appraisers. “On the north coast, any time there is development — hotels and so forth — the workers will need accommodation… then you have returning residents coming back and purchasing as well.”

Levy said property prices surged during the pandemic and have remained elevated, supported by strong demand and limited supply in key areas. Access to financing has also improved.

“In some cases, financing is going up to 90 per cent,” he said. “Before, buyers had to come up with a much larger portion of the purchase price just to get started.”

Even so, affordability remains a constraint.

“There is still a significant gap between what people earn and what it costs to own real estate,” Levy said.