The state-owned Government Housing (GH) Bank is looking to tap into demand from low- and middle-income earner groups with new mortgage schemes, reports local media. The plans will see mortgages with interest rates below 3 percent available to those seeking affordable housing in Thailand.
While plans for the new mortgage packages are still being finalised, they will have interested rates at 2.9 per cent or lower. The loans for affordable housing will be made available to home buyers during the middle part of this year, says GH Bank president Chatchai Sirilai to the Bangkok Post.
At the moment, GH Bank offers the lowest mortgage rate on the market for the first 2 years of a home loan, however, this scheme is set to expire at the end of the month. The 2.9 interest rate is 0.25 points lower than the mortgage industry average which is enough to cut interest expenses by THB700-800 per month for borrowers.
While the figure may seem small, it can be a big help for low- and middle-income earners who wish to own their own home. GH Bank’s mission is to help all Thais own a house. When the economy in Thailand started to fall, the impact was felt most by low- and middle-income earners who found themselves being unable to obtain a home loan from banks.
GH Bank has recorded strong demand for its current low-rate mortgage package and expects this to carry over to the new scheme. The bank was able to raise new loans by 17 per cent with borrowers taking out THB197 billion last year. The company was able to reach its net profit target despite the low interest loans.
The company earned THB11.7 billion in 2017 and is targeting a profit of THB12.1 billion this year. According to GH Bank estimates, the company believes it can hand over THB189 billion in new loans in 2018.
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