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Jamaica Government Reduces Interest Rates On All New And Existing Loans

Jamaica's Prime Minister, Andrew Holness, emphasises a point, while making his contribution to the 2020/21 Budget Debate, in the House of Representatives, yesterday. Photo credit: Rudranath Fraser/JIS.

Jamaica Government Reduces Interest Rates On All New And Existing Loans

KINGSTON, Jamaica March 20, 2020 — As part of the government’s stimulus package to minimise the effects of COVID-19 on the economy, the National Housing Trust (NHT) has reduced interest rates on all new loans by one percent, and on all existing loans by 0.5 percent, effective April 1, 2020.

This will benefit some 8,000 new mortgagors annually, and some 100,000 existing mortgagors.

Prime Minister, Andrew Holness, made the announcement during his contribution to the 2020/21 Budget Debate in the House of Representatives, yesterday.

In addition, the NHT has put in place special relief for mortgagors, who may lose their jobs as a result of COVID-19. These measures are to safeguard persons from losing their homes, while improving their disposable income.

As a result, effective immediately, mortgagors who are laid off can apply for a moratorium on all loan payments of three months in the first instance.

“In February 2020, 11,350 mortgage accounts, valued at $18.3 billion, were in arrears for 90 days and over. Based on the NHT’s loan management procedures, recovery activities, including public auction, were implemented,” the Prime Minister said.

“Effective immediately, the NHT will provide an option to reschedule these delinquent loans. However, this option will only be made available, where the Trust has not already entered into a commitment to dispose of the property,” he added.

Holness said mortgagors are, therefore, encouraged to take advantage of this opportunity, which will be extended for six months, effective April 1, 2020.

Also during this period, the NHT will consider each mortgage, on a case-by-case basis, with the option to extend the tenure of the loan, reduce the interest rate, or some combination.

In addition, mortgagors may also take advantage of the Intergenerational Loan Facility in their rescheduling arrangements.

“All mortgagors, who may have difficulties during this period but whose mortgages are not at the delinquency stage, are being encouraged to make contact with the NHT. We stand ready to assist,” the Prime Minister said.

Meanwhile, the interest rate discounts currently offered to special groups, such as mortgagors, aged 55 years and over, the disabled, as well as public sector workers, will continue.

The interest rate discounts for the disabled will also be extended to include the parents of disabled children, effective April 1, 2020.

There will also be housing benefits for persons, over 65 years, who are voluntary contributors.

Holness said currently, individuals, over the age of 65 years, are not required to contribute to the Trust and are not allowed to access housing benefits.

“The NHT Act, however, makes provision for individuals, who would not, ordinarily, be liable to pay contributions, to do so voluntarily and thereby qualify for benefits,” he stated.

He noted that the NHT Act makes provision for individuals or groups to be classified as voluntary contributors.

“Contributors, aged 65 years and over, will be designated as voluntary contributors and, therefore, be able to access housing benefits with tenure extending up to age 70,” the Prime Minister pointed out.

He also cited the Intergenerational Mortgage Program, which was implemented in financial year 2019/20, and was geared at eligible applicants for NHT scheme solutions.

Holness informed the Lower House that the first beneficiaries of the Program received their solutions in the Darliston and Shrewsbury Housing Schemes, in Westmoreland.

“Beginning April 1, 2020, the NHT will extend this benefit for eligible applicants for other loan products, such as open market purchases and construction loans. Funding under this Program will be capped at the prevailing loan limit,” he noted.

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