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MORTGAGES
KANANA KATHARANGSIPORN
The Government Housing Bank (GH Bank) plans to adjust requirements for low-income earners who want to apply for its special fixed interest rates.
Currently, the special fixed rates are being applied to first-time borrowers who obtain home loans of not more than 600,000 baht. There are two interest options _ a fixed rate for seven years at 5.89% or 10 years at 5.91%. After those periods the rate will be the minimum retail rate (MRR) minus 0.5%.
''We had a small number of customers applying for this special fixed-rate mortgage programme. It may be that the maximum credit line of 600,000 baht is quite low. Today, most people buy houses with prices of 1.5 to 2 million baht,'' said president Khan Prachuabmoh.
Houses costing less than 600,000 baht are very rare in Bangkok and most of them are Baan Ua-arthorn low-cost housing units priced about 400,000 baht each. Those who buy Baan Ua-arthorn housing units can apply for another home loan programme that offers cheap rates.
Under the new conditions, Mr Khan said those who obtain loans for more than 600,000 baht could apply for the two special rates of 5.89% or 5.91% but the amount exceeding 600,000 baht will be subject to normal mortgage rates.
This special fixed-rate mortgage programme was launched in mid-June, and GH Bank released only 400-500 million baht out of a budget of two billion baht. Most customers chose the seven-year fixed rate.
The target customers for the loans are low-income earners whose monthly incomes are less than 15,000 baht.
GH Bank expects the Finance Ministry will approve the new conditions within the next month.
GH Bank expects to relaunch the mortgage campaign with new conditions at the 55th anniversary GH Bank Home Expo 2008 and Second-hand Home Fair from Sept 18-21, 2008 at the Queen Sirikit National Convention Center.
''We will not increase the rate during the second half of the year as interest rates are in a downward trend,'' said Mr Khan.
The fair will not only have second-hand properties featured but also new homes from many developers. They will include Preuksa Real Estate, Supalai, Asian Property Development, L.P.N. Development, NC Housing, KC Property, Lalin Property and Preecha Group.
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