BANK SOUTH PACIFIC (BSP) has funded loans with a total value of K144m, for over 1000 first home-buyers under the BSP First Home Ownership Loan (FHOS).
For first home-owner, Ms Margaret Neme, it was an unbelievable feeling when she got the news from the bank, advising that her application for a home loan was approved.
She was aware of home loan products that were offered in the market, however never took notice of how to go through the process, until her colleges started having discussions about owning their own home.
“I had a choice of preference for what my dream home would be, but I was unsure about making a big investment in my life,” she added.
“I thank God for seeing my family through during these unprecedented times and having made this bold move was great courage in itself. I can now say, my family’s future is safely secured, and a place they can call their own. said Margaret.
This was my conviction, and looking at the rates, thank you to BSP for the competitive fixed interest rate, with repayments over a 40 year term, I told myself that it was worth a try.” added Margaret.
Margaret adds, “I was not too confident about my application, but giving this an attempt, I made sure, I provided all requirements for loan processing. With a few amends and adjustments to her requirements, she successfully qualified for a BSP First Home Ownership Loan.
Today, she shows off her keys to her new home. “It’s an unbelievable feeling when they hand you the keys to your house – something that you call your own” adds Margaret.
The interest in the home ownership and for affordable Home Loan Products has been relatively high since the introduction First Home Owners Loan product in 2015. The majority of loans funded are mostly in Port Moresby largely due to size of market and increased interest from housing developers.
However, interests from potential home buyers also remain high across PNG, from young professionals to long-serving employees in both the public and private sectors.
In the recently published Hausples survey, results showed that 16% of respondents to the survey were employed in the public sector, who were keen to own a home.
While the survey showed that 55% of the respondents lived in a small family unit, husband, wife and children and 21% lived in a typical PNG family unit, where with their parents and extended family.
Over 70% of respondents surveyed were looking to buy their first home, and 80% of the total respondents needed a mortgage to buy a home.
BSP’s Group General Manager Retail, Daniel Faunt says, “The FHOS is considered a catalyst for growth in the housing market. The market has been attractive to property developers who started building homes and offering them for sale in and around Port Moresby.”
Mr Faunt adds, “While there are many constraints to affordable home ownership equally, there is a concerted effort being made by both the private sector and Government to overcome these constraints.”
“BSP has significantly changed the nature of housing loans products. Our BSP Home Loans are suited to meet the more important needs of the customers where the term of repayment can be extended to up to 40 years, the interest rate remain unbeatable despite what our competitor states,” says Mr Faunt.
“Despite facing Covid-19 related issues last year, BSP continues to see an increase in home loan funding particularly with our Standard Home Loan and FHOS which currently have the lowest interest lending rates.”
He added, “The First Home Ownership Scheme (FHOS) and Standard Home Loan is valued at K349 million and while FHOS has contributed to first home ownership, our Standard Home Loan Product has also become a key contributor to customers venturing into home upgrades, renovations and investment property.
The reduction of BSP’s Interest Lending rates by 1% effective 1st April 2020 have also added to the increase in the number of home loans. ”
“While our FHOS remains at the fixed interest rate of 4%, our Standard Home Loan Interest lending rate (ILR) was reduced to 5.5%. That is not just for a number of years but the duration of loan repayment period,” Faunt further added.
The FHOS provides access to all Papua New Guineans to flexible and affordable financial arrangements to enable them to own their own home.