Economy, Business And Markets

Call for Increase in Mortgage Loans

Call for Increase  in Mortgage LoansCall for Increase  in Mortgage Loans

CEO of Bank Maskan – specialized in providing mortgages – has backed the idea of increasing mortgage ceiling in big cities to 600 million rials ($17,400 at market exchange rate) from 350 million rials ($10,150), arguing that applicants will afford paying back. “The loan model proposed for Bank Maskan is the same as a savings model, and therefore works as a deposit box where applicants can save money and take advantage of the amenities after a reasonable waiting period,” Mohammad Hashem Botshekan said as quoted by Eghtesad News. “The increase in mortgage ceiling is unlikely to stimulate the already-weak demand for housing units,” he added, reacting to concerns that provision of larger loans could stimulate demand and end up in higher housing prices. Purchasing power is already low in most major cities and the housing sector has been in recession for the past two years. “Given that about 30% of each household expenditure basket is spent on rent, the 600 million rial mortgage is proposed to assist accordingly,” he stated.It’s not clear yet whether the central bank would approve the proposed ceiling by the end of the year, March 20. “We are waiting for the central bank’s view on the issue,” he said.