Riyadh, Saudi Arabia: The Saudi Real Estate Refinance Company (SRC), a wholly owned company of the Public Investment Fund (PIF), announced today that it lowered profit rates for its long-term fixed-rate (LTFR) home financing products by 10 basis points on average across tenor.
The rate reduction is in keeping with SRC’s commitment to supporting the growth of a robust primary and secondary home financing market in Saudi Arabia. Already among the lowest rate for the home financing products in Saudi Arabia and the wider region, the rate reduction makes LTFR even more accessible and affordable for Saudi citizens through SRC’s partners that include banks and non-bank lenders operating in the Kingdom
“Since inception in 2017, SRC has been instrumental in helping lower home financing costs through the creation of a long-term reference fixed rate,” said Fabrice Susini, CEO of SRC. “We have undertaken several reviews to lower the profit rates in accordance with global market conditions. We also took the necessary measures to ensure our operational excellence and efficiency so that we can ensure profit rates are maintained at the lowest possible level in order to achieve our goal of increasing home ownership rates in the Kingdom. We believe the current market conditions represents an opportunity that is ideal for securing new home financing or refinancing an existing one at lower rates."
SRC buys home financing portfolio from local banks and non-bank lenders, and currently has a portfolio of SAR 6.5 billion as at the end of 2020, up from SAR 2.2 billion in 2019. Earlier this year, SRC issued its largest ever government-backed sukuk worth SAR 4 billion which was oversubscribed by 2.15 times.
Subsequently in April 2021, SRC received an ‘A’ long term issuer credit rating from Fitch Ratings and ‘A2’ long term issuer credit rating from Moody’s, highlighting its highly effective business model and a growing housing market in the Kingdom.
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