Mortgage lenders go ungloved
BOJ reports accelerated loan growthWednesday, August 04, 2021
Bank of Jamaica (BOJ) data indicate that new mortgages for banks and building societies have been growing at a faster pace in 2020 and 2021. Local banks, meanwhile, have been seeking to grow their portfolios even more by offering mortgage holders the opportunity to switch for better rates.
According to BOJ, new mortgages in the March quarter 2021 amounted to $12.7 billion, this compared to $8.9 billion at March 2020 and $7.2 billion at March 31, 2019.
Seeking to upsize its portfolio even further is CIBC FirstCaribbean International Bank (FCIB), which is offering homeowners zero interest and no payment for the first three months of a client's mortgage, as well as up to US$10,000 towards switching cost, no commitment fees, and a pre-approved gold/platinum credit card for approved mortgage applicants.
Applications must be received within the campaign period to be eligible for the offer and disbursed no later than January 31, 2022. The offer is applicable to residential mortgage purchases and switch mortgages only. The offer is not applicable to construction mortgages.
The applicable interest for the campaign is 6.75 per cent per annum. CIBC FCIB told the Jamaica Observer that the company, during the 2020 financial year, recorded a 36 per cent growth in the value of mortgages disbursed, which also represented an increase of 10 per cent in the number of clients. Approximately 30 per cent of the mortgages disbursed in 2020 were over $20 million.
The company is anticipating a slowdown in this growth rate; hence its campaign.
“Our expectation is that the pace of this growth will slow, relative to 2020, during the 2021 financial year. This is likely to gain momentum as the economy rebounds,” it said.
NCB, on its part, is also anticipating further growth in the mortgage market. Sheree Martin, head, Retail Banking Division, NCB stated, “Our mortgage performance continues to be robust with an annual compounded growth rate of over 13 per cent since our return to the mortgage sphere in 2012. A closer look at our year over year average growth for 2019/ 2020 and YTD 2021 has revealed annual growth of over 11 per cent. We continue to view the enablement of Jamaicans to purchase properties as an area of focus.”
Added Martin: “Based on our analysis, the mortgage market and housing sector as a whole has been resilient even through the pandemic. The housing market continues to see the birth of new developments and Jamaicans both at home and abroad continue to avail of mortgages.”
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