Saudi Arabia’s central bank said in a statement it plans to launch an “affordable mortgage” program to finance residential real estate purchases by Saudi citizens, according to reports.
Home buyers would be responsible for a down payment of 15 percent of the property’s value, and commercial banks would supply a further 70 percent. An additional 15 percent that would be guaranteed by the Ministry of Finance.
The new rate of 15% advance payment is half of the previous requirement of 30% introduced 15 months ago. The rapid adjustment down to 15% has been welcomed by the construction and housing sector as well as home-buyers.
The new terms have been agreed on with the Saudi housing and finance ministries, according to the statement.
Bloomberg quotes Murad Ansari, a Riyadh-based analyst at EFG-Hermes Holding SAE as saying the new rules are great for the average Saudi. “Certainly a positive development because it will make buying a house more affordable for an average individual.”
