| 11 Mar 2010 |
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HSBC Cuts Mortgage Rate to Woo New Customers
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DUBAI - HSBCHSBC
on Wednesday announced a reduction in its variable mortgage rate for new customers from 8.5 per cent to 6.75 per cent, a move property analysts said would give a fillip to the real estate industry. The bank said the new rate would be effective immediately. First time buyers and new customers with a 25 per cent deposit can take advantage of HSBCHSBC's revised rate when purchasing a completed property.
HSBCHSBC "Premier Customers" will receive a further reduction on the rate of 0.5 per cent while HSBCHSBC "Status" customers will receive a reduction of 0.25 per cent. Current HSBCHSBC mortgage customers will have their rates reviewed on April 1 in line with the bank's commitment to review rates every quarter, the bank said in an emailed statement.
"HSBCHSBC
is very much open for business, and wants to provide more flexibility and choice for customers who are looking to own a home. Price valuations are currently very attractive in the housing market and our new reduced rate will make it easier for end-users to get affordable mortgage finance," said Ishrat Kiyani, Head of Premier and Wealth Management, UAE, HSBCHSBC.With the UAE property sector undergoing a period of turbulence in the wake of the economic downturn, the country's mortgage industry witnessed a sharp contraction in 2009. Total mortgage loans given by the UAE's 24 national banks and 28 foreign units declined to Dh15 bilion in the first 11 months of 2009 from Dh74 billion in 2008, Central BankCentral Bank figures show. To revive the sector, banks and finance companies in the UAE have started reducing their home loan rates this year.
In November 2009, the Central Bank of the UAECentral Bank of the UAE
said it was working on drafting new rules to regulate mortgage loans, protect consumers of financial services besides formulating a law for wholesale banking business in the country. The Central BankCentral Bank move came as banks and financial institutions made huge provisions in the last three quarters of the 2009 financial year to cover bad debts in order to reduce their burgeoning liabilities on their balance sheets. "We understand that investor confidence has been low, however we believe that owning a home continues to be an extremely important decision for residents of the UAE. It is also key to point out that in attractive locations across the UAE, buying a home can be cheaper then renting," added Kiyani.With the new rate reduction and a variety of options at competitive prices, HSBCHSBC continue to support the UAE housing mar, said Kiyani.
HSBCHSBC mortgages are available to expatriates and nationals with loan terms of up to 25 years or until the age of 65, which ever occurs first. To qualify, mortgage holders must have a minimum salary of Dh20,000.
By Issac John
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