Housing loan interest rates adjusted |09 December 2008

He said the company has been forced to revise the rates because HFC borrows from commercial banks, who are themselves now charging higher interest rates.

“For us to continue operating in a viable manner we must at least partially pass on the new rates to our clients,” he said.

The normal housing loans, for amounts not exceeding R350,000, will now charge 13% interest, up from the current average of 7%.

“Interest for second housing loans of up to R175,000, with which children build on their parents’ property, will also be charged 13% instead of the present 7%,” he said, adding that “commercial loans”, in which Seychellois borrow between R351,000 and R500,000 to build their houses will now be charged at the rate of 16%, up from the present 10%.

“House extension loans that go up to R75,000 will now attract 13% interest, up from an average of 7%, while interest on house improvement loans whose amounts are up to R50,000 will be adjusted from 6% to 10%,” said Mr Bastienne.

He said the rate for special loans that fall under the Home Ownership Scheme introduced in 2005 will not be adjusted from the current 5%.

He said all clients will be contacted, and HFC could consider rescheduling loans where there is a possibility to pay over a longer period.