The move is aimed at supporting the growth of the kingdom's secondary mortgage market
Saudi Public Investment Fund subsidiary Saudi Real Estate Refinance Company (SRC) has reduced rates for its long term, fixed-rate (LTFR) mortgages offered to eligible borrowers by its partners, it was announced on Thursday.
In a statement, SRC said that the move is aimed at supporting the growth of Saudi Arabia’s secondary mortgage market and to increase liquidity and facilitate access to domestic and international financing sources.
SRC has reduced the profit rates on 15-20 year LTFR mortgage loans. 20-year loans, for example, have done from 7.10 percent APR (3.85 percent flat) to 6.25 APR (3.52 percent flat) effective from April 29, 2019.
Driven by macroeconomic factors, the rate drop enables SRC and the partner primary originators to pass on the benefits to end borrowers.
“The rate drop on our already attractive LTFR products makes home ownership ever more affordable and accessible for Saudi citizens, and on the back of the great work done by the DMO/MOF to extend the tenor of the curve, we will soon provide competitive pricing for even longer tenor,” said Fabrice Susini, CEO of SRC.
“This also acts as a critical enabler in facilitating the mortgage penetration, which is among the lowest in the region,” he added. “In this context, the development of a secondary housing finance market will ultimately meet the Vision 2030 housing sector goal of increasing home ownership to 60 percent by 2020 and 70 percent by 2030.”