Despite steps to reduce the tight credit conditions, many potential homebuyers are finding it difficult to secure loans, says minister

pic by HUSSEIN SHAHARUDDIN

PUTRAJAYA wants Bank Negara Malaysia (BNM) to ease the rules for mortgages to help first-time buyers purchase their house.

Finance Minister Lim Guan Eng said despite steps to reduce the tight credit conditions, many potential homebuyers are finding it difficult to secure loans.

The government’s RM1 billion fund for first-time homebuyers, introduced in January this year, has only been approved for 3,100 applications as of Oct 31 for a total loans of RM596.3 million.

Lim said the easing of the lending criteria would allow the fund to be fully utilised.

“I still think the lending conditions are strict. We hope BNM can consider other avenues to facilitate the applications made by first-time homebuyers. The government has discussed with BNM on this and has mooted a progressive loan repayment plan for the bank to consider.

“However, this is being reviewed. The central bank is mindful of the percentage of household debt which they consider as still high,” Lim told the Dewan Rakyat yesterday, responding to a supplementary question by Datuk Mohd Salim Mohd Sharif (Barisan Nasional-Jempol).

BNM and other financial institutions have taken various measures since the start of the year to reduce the costs involved in owning homes which included the provision of the RM1 billion fund. The fund allows first-time homebuyers, especially young people, to acquire loans at a cheaper concession rate against a market value of 3.5% per annum with a longer repayment period of 40 years.

“The lower financing rate and longer financing period can help improve borrowers’ ability to repay the loan by reducing monthly repayments. It will also help boost their purchasing power and increase their access to financing,” Lim said.

BNM has also revised the eligibility criteria for the fund by raising the maximum monthly household income to RM4,360 and the price ceiling for homes to RM300,000 effective Sept 1 this year.

Apart from access to financing, Lim said knowledge on financial management is also important to ensure that first-time homebuyers can manage the monthly repayment schedule.

He said the financial education module provided by the Credit Counselling and Credit Management Agency (AKPK) online, namely the Rumahku portal, will help homebuyers understand the financial commitments they will face before buying a home.

AKPK also provides credit management programmes for individuals needing assistance in managing credit loads with financial institutions.