DUBAI - Saudi Arabia's central bank lifted the maximum loan-to-value rate on Thursday for mortgages for first-time homebuyers to 90 percent from 85 percent in an effort to stimulate mortgage lending.
"Raising the maximum limit of the percentage of financing of the value of the first house for citizens will contribute to supporting the growth of the real estate financing sector," the Saudi Arabian Monetary Authority
) said in a statement on its website.
It said the decision also aims to help the kingdom achieve its national housing strategy, part of wider economic reform plans, but added that the move must not affect the stability of the financial sector.
Housing Minister Majed al-Hogail welcomed the move as a step to enable low-income Saudis to own their first home.
"My colleagues in @SAMA
_GOV have helped us ease the burden on citizens by reducing the advance payment to 10 percent," he said in a message on his Twitter account, adding that all interest on mortgage loans of first time-buyers who earn less than 14,000 riyals ($3,733) will be paid by the ministry.
raised the loan-to-value rate for first-time buyers to 85 percent from 70 percent a year ago.
($1 = 3.7503 riyals)
(Reporting by Marwa Rashad; Writing by Sami Aboudi; Editing by Peter Graffand Leslie Adler) ((firstname.lastname@example.org; +971-4-3918301))