Right now appears to be a good time for home-buyers to apply for a mortgage, as interest rates are on a downward trend and competition among commercial banks is on the rise.

Many banks have already adjusted their housing loan packages and long-term fixed-rate deals have returned to the market after a short disappearance. Some of the packages offer attractive privileges to home-buyers.

However, customers who want to apply for housing loans should carefully consider the conditions set by each bank. Some are offering lower interest rates as part of a promotional package and customers must apply within a limited period. In some cases, a lot of conditions are set for the special rate offers.

Bangkok Bank has decreased its Bualuang Home Loans rate by 25 to 50 basis points, with three options. The first package gives customers a fixed rate of 4.5 per cent for the first year, followed by the bank's minimum lending rate (MLR), which is currently 7.25 per cent, for the rest of the loan period.

The second package offers a 5.75-per-cent fixed rate for the first year, 6 per cent for the second year, and the MLR thereafter. In its third choice, Bangkok Bank offers to charge its MLR minus 1 per cent for the first three years and thereafter the full MLR rate.

Moreover, customers can pick up a further discount of 25 basis points for one year, if they sign up for Bangkok Bank's "Home 1st" home-insurance policy.

These loan packages offer up to 30 years of maturity and top-up loans are available for fire and credit insurance. However, the special rates are available only until June 30.

Krung Thai Bank has also reduced its mortgage-loan rate by 25 to 50 basis points and is offering home-buyers four choices. The first offers a first-year fixed rate of 4 per cent, followed by the bank's MLR minus 0.25 per cent, or 6.75 per cent per year.

The second option provides a first-year fixed rate of 3.75 per cent, followed by Krung Thai's full MLR, which is presently 7 per cent per year.

The third option offers a first-year fixed rate of 4.25 per cent, followed by the MLR minus 0.25 per cent, and the final option a first-year fixed rate of 4 per cent, followed by the full MLR.

The first two loan packages are available only for customers of Krung Thai Bank's developer clients. General customers can choose from the remaining two.

Kasikornbank is offering six alternatives for housing loan customers who want loans not exceeding Bt10 million. The first three options are a choice between fixed rates of 4 per cent for the first year, 5.75 per cent for the first two years, or 6.75 per cent for the first three years.

The remaining three alternatives involve floating rates: the bank's minimum lending rate (MLR) minus 3 per cent for the first year, the MLR minus 1.5 per cent for the first two years, or the MLR minus 1 per cent for the first three years.

Thereafter, all packages will charge the full MLR for the remainder of the loan period. For customers who want to borrow more than Bt10 million, the full MLR applies throughout the loan period.

United Overseas Bank (Thai) is promoting mortgage packages with a special rate of 2.99 per cent for the first six months. However, the deal involves several conditions.

Customers will be charged a 2.99 per cent fixed rate for the first six months, followed

by 3.99 per cent for the second six months. After that, the rate will be UOB's MLR minus 1 per cent, or a minimum 5.25 per cent. These rates are available only for customers of the bank's financed developers. They must also apply for the bank's suggested home-insurance policy.

If they don't apply for UOB's home-insurance policy, the rate for the first six months will rise to 3.49 per cent.

The Government Housing Bank is offering four mortgage loan packages, and has suggested there may be even cheaper deals in the near future.

The first package involves floating rates and three choices: GHB's minimum lending rate (MLR) minus 1.5 per cent for the first year, the MLR minus 1.25 per cent for the first two years, or the MLR minus 1 per cent for the first three years. Thereafter, the rate is the full MLR, which is presently 8 per cent.

The remaining three packages have fixed interest rates in the early years of a loan. The first offers borrowers of not more than Bt1 million a 6-per-cent fixed rate for the first three years, followed by the bank's minimum retail rate (MRR) minus 0.5 per cent, which currently makes a rate of 7 per cent.

The second option offers fixed interest-rate increments covering the first five years of a loan. The rates begin at 6.25 per cent for the first year, followed by increments of 25 basis points per year until the fifth year, when the rate will be 7.25 per cent. Thereafter, the rate will be the bank's MRR, which is currently 7.5 per cent.

The final package also offers fixed rate increments, but covering the first 10 years of the loan, rather than the first five. It is the longest fixed-rate package on the market. The rate starts at 6.25 per cent for the first year and increases by 25 basis points per year until the fifth year. From the fifth to 10th years, the rate will be 7.25 per cent. After that the rate will be the full MRR.

Somruedi Banchongduang

The Nation