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Three of the new policies that were recently announced by the National Housing Trust (NHT), are now in effect. These policies are the reduction in interest rates, increase in loan limits and the removal of the 5% deposit on Scheme Loans. The effective date was May 1, 2010. Another policy which the NHT had announced last year, namely the use of Contributions to help meet deposit requirements, also came into effect on May 1, 2010.

Here is an overview of the recent interest rate policy changes:

To re-cap, all NHT contributors applying for loans to build or buy houses or lots, will enjoy at least a 1% reduction in the interest rate at which those loans will be calculated. This change will benefit both existing and new mortgagors. For existing mortgagors, it will mean a reduction in monthly payments. For new mortgagors, it means increased affordability. On the one hand, some persons who did not previously qualify for NHT loans will now qualify, while persons who had previously qualified, will now be able to get more to borrow from the NHT.

The benefits will be even greater for public sector employees, who have been given an additional 1% reduction on their interest rate over the next three years, thus bringing the overall reduction in their rates to 2%. New mortgagors, 55 years and older, who have also been singled out for special attention, will receive their loans at 2% below the rate applicable to other persons in their income group.