Finance Minister Pichai Chunhavajira has instructed the Government Housing Bank (GHB) to help Thai people to own their own home by extending the mortgage period up to a maximum of 85 years, from the current 70 years, according to a well-informed source in the Finance Ministry.
The minister has also told the GHB to increase credit lines for housing loans, from three to ten million baht, and to increase its capital.
The source said that the GHB should be more active in issuing mortgages loans at a time when most commercial banks have tightened up lending due to the sluggish economy and concerns over borrowers’ ability to repay.
GHB’s loans now account for one-third of the mortgages extended by all financial institutions and, if GHB can increase its capital, it will be able to help many home buyers who are experiencing difficulty in getting a mortgage. It would also ease the glut of unsold homes, according to the source.
GHB Managing Director Kamolphob Weerapon said that GHB customers can now contact the bank to ask for an extension of their repayment period up to 80 years (85 years for government officials).
He said the repayment period extension will reduce the monthly instalments by 500-2,000 baht on a monthly instalment of 4,100 baht for one million baht mortgage.
The GHB’s non-performing loans are currently estimated at 5.7% of all housing loans and the bank aims to reduce them to less than 5%, said Kamolphob.
Photo by Jack TAYLOR / AFP
