Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
UAE
Print
Email
Discuss this article (8 Comments)HSBC eases lending rules on UAE property
by This email address is being protected from spam bots, you need Javascript enabled to view it on Tuesday, 31 March 2009
zoom
HSBC Middle East is to re-enter the mortgage market in a dramatic shift in lending policy, it announced on Tuesday.
The bank, which all but pulled out of the home loan market in the UAE due to the liquidity crunch, will now offer 75 percent financing on completed villas, 70 percent on completed apartments and 50 percent on off-plan units.
Previously its loan to value ratio had been lowered to 60 percent and 50 percent for villas and apartments, in a tightening of lending policy that was mirrored across the sector.
Abdulfattah Sharaf, CEO of Personal Financial Services, Middle East said: "This move will provide more flexibility and choice for our customers who are looking to own a home."
"HSBC continues to be a responsible lender and as such the offer is primarily targeted at end-users who have recently faced acute difficulties getting affordable mortgage finance," he added.
Under the terms of the new mortgage deals applicants, nationals and expatriates, must earn a minimum of AED20,000 per month.
The maximum loan term is five to 25 years, or until the borrower reaches the age of 65, which ever occurs first, and interest will start from 8.5 percent, on a variable rate.
In November, HSBC doubled the minimum salary someone must earn to qualify for a personal loan from AED10,000 to AED20,000.
READERS' COMMENTS
Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
Damned if you do...damned if you don't !!
Posted by Omar, Dubai, United Arab Emirates on Wednesday 10 June 2009 at 17:20 UAE time
To all those that left negative comments about the banks and their lending policies I generally agree. I think GREED did rule the day and that is what got us into this global financial mess. However, just to comment on why the current interest rates are so high in the UAE is that the cost of borrowing (interbank) which banks need to do to provide the liquidity required to fund loans has risen. Now that said it has risen everywhere so you could ask why are rates so high in the gulf compared to say the US or Europe? My answer...just a guess...is to do with the legal and financial framework in the GCC...where banks have less controls upon them and a more free to operate. I think the matter is more complex than the layman knows. That said in this economic climate the risk of lending is very high (increasing unemployment etc.) and so the banks now want to be cautious. However, they are under pressure to free up credit and increase loans. If they do so charging high interest rates to cover the risk they get slammed for the high interest rates. If they don't loan, fearful of the risks, they get slammed for not freeing up credit. So they are damned if they do and damned if they don't.
I took out a sizeable mortgage last year based on high income and a positive view that this income was sustainable. I intended to repay the mortgage in just 3 years. Unfortunately my income stream is greatly reduced and I am now under extreme pressure to maintain my payments. Who should I blame...ME! As the saying goes "Beware...all glory is fleeting!".
Posted by Omar, Dubai, United Arab Emirates on Wednesday 10 June 2009 at 17:20 UAE time
To all those that left negative comments about the banks and their lending policies I generally agree. I think GREED did rule the day and that is what got us into this global financial mess. However, just to comment on why the current interest rates are so high in the UAE is that the cost of borrowing (interbank) which banks need to do to provide the liquidity required to fund loans has risen. Now that said it has risen everywhere so you could ask why are rates so high in the gulf compared to say the US or Europe? My answer...just a guess...is to do with the legal and financial framework in the GCC...where banks have less controls upon them and a more free to operate. I think the matter is more complex than the layman knows. That said in this economic climate the risk of lending is very high (increasing unemployment etc.) and so the banks now want to be cautious. However, they are under pressure to free up credit and increase loans. If they do so charging high interest rates to cover the risk they get slammed for the high interest rates. If they don't loan, fearful of the risks, they get slammed for not freeing up credit. So they are damned if they do and damned if they don't.
I took out a sizeable mortgage last year based on high income and a positive view that this income was sustainable. I intended to repay the mortgage in just 3 years. Unfortunately my income stream is greatly reduced and I am now under extreme pressure to maintain my payments. Who should I blame...ME! As the saying goes "Beware...all glory is fleeting!".
Home Mortgages
Posted by Manoj Sabharwal on Monday 25 May 2009 at 12:26 UAE time
Is it not funny that on one hand banks in the UAE justify exorbitant lending rates to poor liquidity - and yet when you want to repay a loan in full or part, they charge you a 2% fee. Where are the days when you got rewarded for repaying your debt.
Posted by Manoj Sabharwal on Monday 25 May 2009 at 12:26 UAE time
Is it not funny that on one hand banks in the UAE justify exorbitant lending rates to poor liquidity - and yet when you want to repay a loan in full or part, they charge you a 2% fee. Where are the days when you got rewarded for repaying your debt.
What a Joke
Posted by James, Dubai, UAE on Thursday 2 April 2009 at 11:30 UAE time
Clearly the same incompetents running the show that got the world into this mess.
Any fool can see that the only way to stimulate the market is to cut rates not make more loans.
HSBC are not trustworthy either. They gave me a loan based on the US Federal Funds Rate. It was advertised and explained to me as following the direction of this rate.
This year they increased it by 1.5% citing "discretionary powers" and EIBOR tracking and some small print powers.
Plain and simple - They lied. To take a loan from these bankers is pure folly. The past regime must go and banking must be placed in steady, responsible and trustworthy hand before there will be any recovery in these parts.
HSBC and others - Drop your rates before you ruin the whole economy. Stop focusing on your bonuses...
Posted by James, Dubai, UAE on Thursday 2 April 2009 at 11:30 UAE time
Clearly the same incompetents running the show that got the world into this mess.
Any fool can see that the only way to stimulate the market is to cut rates not make more loans.
HSBC are not trustworthy either. They gave me a loan based on the US Federal Funds Rate. It was advertised and explained to me as following the direction of this rate.
This year they increased it by 1.5% citing "discretionary powers" and EIBOR tracking and some small print powers.
Plain and simple - They lied. To take a loan from these bankers is pure folly. The past regime must go and banking must be placed in steady, responsible and trustworthy hand before there will be any recovery in these parts.
HSBC and others - Drop your rates before you ruin the whole economy. Stop focusing on your bonuses...
HSBC
Posted by ajoy, jalgaon, india on Thursday 2 April 2009 at 07:28 UAE time
Is 8.5% a reasonable interest in current scenario? It is as if some one says....donot be scared...I would slash your throat without pain... Waht these banks are doing. Why donot they understand that we are the same people whom they were giving loan without any trouble! why this shift in attitude now? because people in trouble!!remember banks....our good days and your good days will return again but not the scares you people are inflicting to us in our rainy days!!!!!!!!!!!
Posted by ajoy, jalgaon, india on Thursday 2 April 2009 at 07:28 UAE time
Is 8.5% a reasonable interest in current scenario? It is as if some one says....donot be scared...I would slash your throat without pain... Waht these banks are doing. Why donot they understand that we are the same people whom they were giving loan without any trouble! why this shift in attitude now? because people in trouble!!remember banks....our good days and your good days will return again but not the scares you people are inflicting to us in our rainy days!!!!!!!!!!!
Click here to post a comment
MORE FROM ARABIANBUSINESS.COM
TOP IN MIDDLE EAST REAL ESTATE
TOP MIDDLE EAST BUSINESS STORIES
ALSO IN MIDDLE EAST REAL ESTATE
LATEST MIDDLE EAST BUSINESS NEWS
- Energy: ABB wins $38m deal to improve power efficency
- Politics & Economics: UAE sees fourth consecutive month of deflation
- Construction & Industry: UK builders still chasing $330m from UAE - report
- Politics & Economics: UAE tops list of foreign investors in Iraq in 2009
- Energy: Oman sees oil price at $70-$80 per barrel in 2010
SHARE PRICE CHECK
RELATED STORIES
HSBC
| 31 stories- UAE traders more optimistic in Q3 - HSBC
14 Oct '09 | News - Are you too poor for HSBC?
7 Oct '09 | Comment - HSBC mulls AED20,000 salary limit for customers
6 Oct '09 | News
Mobile
