If you happen to drop by Scotia Bank’s Carmichael Street branch you will hear a continual recording of the voice of Branch Manager Matthew Langevine offering mortgages at “rock bottom” interest rates. Scotia invites its customers to get mortgages that are “the right fit for you” – interest rates of 4.95 per cent on loans of up to $3 million and 6.9 per cent for amounts of up to $8 million.
Scotia’s mortgage offers are nearly identical at all of the country’s commercial banks where life size posters and full-page newspaper advertisements are buttressed by eager loans officers.
The New Building Society (NBS) claims the credit for the current rush to offer rock bottom rates. NBS’s Information Tech-nology Manager Bobby Majeed told Stabroek Business that the NBS pioneered the current low-interest mortgage. “We took the initiative and the other banks capitalized on it,” Majeed said. He said that low-interest mortgages were closely linked to the expansion of state distribution of house lots across the country. He said the push by banks towards low-income mortgages was triggered by a November 2009 announcement by government that removed taxes on the $3 million and $8 million mortgage transactions. The low-income mortgage scheme was first introduced in 2001 in tandem with the creation of a number of land distribution initiatives that were attended by the creation of infrastructure including water, roads and drainage facilities. Those were funded through a loan from the Inter-American Development Bank (IDB) and government last month signed a contract with the bank under which it has secured funding for a second settlement development project.
Information available on the website run by the Central Housing and Planning Authority indicates that $852 million in contracts have been signed with eight local companies for the construction of roads, the digging of drains and the creation of water distribution networks. The areas identified for these infrastructural works include Ordinance Fortlands in Region Six; Tuschen in Region Three and Lusignan and Sophia in Region Four. This project is expected to clear the way for the provision of 2,173 house lots.
