Although the real estate market has yet to bottom out, several domestic banks are gearing up to compete for new mortgage business.
One day after the Cabinet said it would release another NT$200 billion (US$5.92 billion) in preferential mortgage loans with an annual interest rate as low as 1.325 percent, DBS Bank (星展銀行) yesterday launched mortgage loans with a two-year fixed rate of 1.88 percent.
After that period, the interest will float at 1.12 percent above the time deposit index, which would be 1.88 percent at the current level.
“That will be the lowest interest rate available on the market for up to two years,” DBS general manager Jerry Chen (陳亮丞) said, adding that the program would run until June 30.
With more than NT$10 billion available for mortgages, DBS plans to grant mortgages with a loan-to -value ratio of up to 80 percent.
The bank said its mortgages would average 1.88 percent interest in the first three years — lower than mortgages at state-run banks and foreign banks.
Bank of Taiwan (臺灣銀行) offers mortgages with an initial 1.833 percent interest rate in the first six months before rising to between 2.049 percent and 2.249 percent, while Land Bank of Taiwan (土地銀行) and Taiwan Cooperative Bank (合作金庫銀行) grants mortgages with an initial minimum 1.5 percent rate for six months before climbing to between 1.99 percent and 2.25 percent.