Mortgage market thriving
Mon, 07/25/2016 - 12:08am
There has been much interest shown in reverse mortgages in recent times and while some persons are lobbying to have this financial instrument introduced in Barbados, some banks seem wary of offering it as an option to Barbadians.
In fact, Susan Torry, General Manager, Retail Banking at Republic Bank (Barbados) Limited, in a recent interview with Business Monday, indicated that it is not likely a route that commercial banks will take any time soon, if at all. Torry explained that this is because they have seen it fail in other markets. While the Republic Bank is not entertaining any thoughts of reverse mortgages at this time, Torry explained that they offer mortgages up to age 70, based on a person’s income earning capacity and their ability to meet the lending criteria. Additionally, she indicated Republic Bank also provides home equity loans, through which homeowners can use the equity in those properties as security to acquire additional financing.
“While we don’t do the reverse mortgages, we do give you a longer period to pay, plus Republic Bank offers 100 per cent financing on mortgages up to a certain limit,” the General Manager, Retail Banking stated.
On that note, Torry revealed that contrary to popular belief, Barbadians are continuing to show great interest in acquiring houses and the demand for mortgages at that lending institution continues to rise. Referring to their ongoing ‘Ready to Move?’ mortgage campaign, the Republic Bank official while not disclosing specific figures, said that over the last two months “quite a number of persons” have been submitting applications for such loans and they expect that this trend will continue even after the promotion ends.
“…Right now we have a rate offered to the public of 4.5 per cent and from that campaign we are seeing that people still want their own home. So even if they are wary of expenditure, people want their own home and we support persons having their dream and owning their property,” she said.
Torry added, “So it is not that people are not borrowing, they may think hard about it, but people are making approaches for loans both on the mortgage side and otherwise.”
Her comments came as she explained that this surge in interest among Barbadians in terms of homeownership is no doubt being driven by the low mortgage rates available across the market. The retail banking expert stated that Republic Bank’s mortgage rate is the lowest at this time at 4.5 per cent, down from 5.5 per cent prior to the promotion, but in general, she said, the rate across the market is in this vicinity. She pointed out that in response to the Central Bank’s decision last year to remove the minimum savings rate, banks have brought down the rates of the products available on the lending side.