Reduced Mortgage Interest Rates announced for Jamaica effective July 2016
During the reading of the budget, practically everyone in Jamaica was focused on the debate to hear what the government had to say about the January 2016 election promise to increase the income tax threshold to $1.5 million from $592,000 per year. I know I was.
So, on Tuesday May 22, 2016, I wasn't really expecting the Prime Minister of Jamaica, Andrew Holness, to say "if you were not thinking of owning a house or building a house, now is the time." What was he on about? He was talking about how the real estate market in Jamaica would be altered effective July 2016 when the interest rates offered by the National Housing Trust (NHT) change. Learn more about how this could affect you.
- Do you contribute to the NHT?
If yes, you’ll now be able to apply for a home grant if you've contributed to the NHT for only 7 years, versus the present minimum requirement of 10 years.
- Do you earn $7,500 to $12,000 per week? If yes, on your own you'll be able to borrow up to $4.89 million from the NHT for getting a home. More importantly, you'll only need to only pay back the principal of your loan. That's right! With no interest payment required.
If there are two of you wanting as NHT contributors to buy or build the house of your dreams, you'll be able to borrow up to $9.8 million jointly.
So what does that mean, if you borrow $9 million from the NHT, you'll only need to pay them back $9 million. That’s a sweet deal for anyone.
- Do you earn $12,001 to $20,000 per week?
If yes, you’ll be eligible for an NHT loan with 2% per annum mortgage interest rate, down from 4% per annum.
- Do you earn $20,001 to $30,000 per week?
If yes, you’ll get to access to an NHT loan at 4% per annum, down from 6% per annum to build or buy the property you want.
- Do you earn $30,001 or more per week?
If yes, you’ll continue to have access to an NHT loan at 6% per annum.
- Are you disabled or a senior citizen?
If yes, you’ll continue to benefit from a 2% interest rate reduction from the standard rates.
- Are you a public-sector worker?
If yes, you’ll continue to benefit from a 1% interest rate reduction from the standard rates.
- Buying only land?
If yes, the NHT loan limit will increase from $1.5 million to $2 million for land-only property purchases.
A summary of the new interest rates is provided in the table below.
|Earnings||Standard Rates||Disabled / Seniors||Public Sector|
|$7,500 to $12,000 weekly||0%||0%||0%|
|$12,001 to $20,000 weekly||2%||0%||1%|
|$20,001 to $30,000 weekly||4%||2%||3%|
|Over $30,000 weekly||6%||4%||5%|
New NHT Interest Rates
In a property market, where you can easily get a studio or one bedroom apartment in a great location for $5 million to $10 million, maybe Andrew Holness is right. Now may be the time to buy. Visit NHT’s offices or check out their website for further details.
In closing, I thought I should add the following for those of you who hadn't already known. While the governing party has not exactly kept their election promise, the budget included an increase in the income tax threshold to $1,000,272 up from $592,000 per year starting July 1, 2016.
All the best in buying your next property and don’t forget to check out what we have to offer on Nohuts.com.