Interest rates for preferential mortgages for first-time home buyers would rise by 0.125 percentage points at state-run lenders to fully reflect the central bank’s latest rate hike, the Ministry of Finance said yesterday.
The central bank last week raised its policy discount rate from 1.375 percent to 1.5 percent, the second increase after a 0.25 percentage point hike in March, to help combat inflation.
The rate hike prompted Chunghwa Post Co (中華郵政) to raise interest rates for two-year time deposits by the same pace to 1.22 percent, effective yesterday.
Photo: Clare Cheng, Taipei Times
The ministry, which has controlling stakes in eight state-run lenders, said the banks may make the same adjustment of 12.5 basis points for mortgages for first-time home buyers.
Interest rates for first time-home buyers are the lowest on the market and unaffected by selective credit controls, in line with the government’s effort to address low housing affordability.
That is why the ministry in March subdued the first rate hike by 50 percent to help ease the mortgage burden on first-time home buyers.
The benefit would expire at the end of this year, the ministry said, meaning first-time homeowners would see their mortgage burden rise by another 12.5 basis points next year, regardless of the central bank’s policy moves afterward. The cap for preferential loans is set at NT$8 million (US$268,546).
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