Restrictions relaxed on mortgages to offer 70% financing on completed apartments.
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.