BNM rejects proposal to lengthen the repayment period

Bank Negara Malaysia(BNM) has rejected calls to lengthen the repayment period for housing loans from 35 years to 40 years.
BNM said such extension will do little to reduce borrowers’ debt obligation as it is not he main reason behind the failure of potential house buyers to acquire homes but affordability and a shortage of reasonably priced houses.

The reason to reject is to prevent borrowers from falling into financial hardship due to excessive debt burden that may lead to foreclosures which will undermine the objective of house ownership.
BNM was responding to calls for it to review the lending guidelines and housing loan repayment period from 35 to 40 years.

Despite demand for houses continues to be healthy, the country’s property market has seen sales stuttered in the last 18 months. Developers continue to build homes above RM500,000 when many first-time buyers are seeking for properties below RM200,000.
One of the measures taken to curb the rise is the abolishment of developer interest bearing scheme introduced in January 2014. It also introduces responsible financing guidelines to manage the household debt growth.

In 2010, the government introduced property gain taxes for properties sold within five years, while BNM raised the maximum loan-to-value ratio, and reduced the maximum tenure for residential mortgages and personal loans.
Earlier this month, Urban Wellbeing, Housing and Local Government Minister Tan Sri Noh Omar announced that developers can now provide up to 100% loan to their house buyers.

Noh was reported as saying that property developers can begin to apply for money-lending licences from the ministry and provide loans to home buyers.

Since the proposal was announced earlier this month, many economists have expressed concerns that the move would not resolve the fundamental problem faced by first-time house buyers.

Last week, the Cabinet instructed the ministry to review and refine several aspects that could be incorporated into the mooted property developers’ money-lending licence scheme.

Real Estate and Housing Developers’ Association Malaysia said its members are more keen in providing financing worth between 10% and 15% of property prices for units that are priced RM500,000 and below, and the offer is exclusive for first- and second-time home buyers.

BNM has not commented on Noh’s proposal on allowing developers to become lenders to house buyers.

Source :- MalaysianReserve

  Apple CEO, Tim Cook  delivered a message Wednesday to students at Scotland's University of Glasgow, where

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.