Deals abound as rates rise, interest dips

With interest rates on mortgages expected to rise 0.5 per cent to 1 per cent this year, developers are teaming up with banks to offer financing packages to lure home-buyers in the second quarter.

The marketing push comes at a tough time: Consumer confidence has been seen dipping and the political turmoil is showing no signs of abating.

Commercial banks have already started increasing rates. Kasikorn-bank raised fixed-term deposit rates by 0.35 per cent to 1.25 per cent last week. The bank raised its minimum lending rate, minimum overdraft rate and minimum retail rate (MRR) to 7.25 per cent, 7.5 per cent and 7.75 per cent.

Bangkok Bank has increased key lending rates by 0.375 per cent, raising the minimum lending rate to 7.25 per cent. The minimum overdraft rate has risen to 7.5 per cent and the MRR to 7.75 per cent. Siam Commercial Bank's minimum lending rate now stands at 7.25 per cent, the minimum overdraft rate is 7.5 per cent and MRR is 7.75 per cent. Asian Property Development senior executive vice president Visanu Suchatlumpong said the company has teamed up with Siam Commercial Bank to offer two financing packages to home-buyers between now and the end of August.

The first package offers zero-per-cent mortgages for the first six months of the loan. For the remaining period, the mortgage will be set at the MRR. The second package offers a fixed rate of 2.25 per cent for the first year and then an MRR of 1.5 per cent.

"Most customers select the second package because they believe interest rates will rise significantly with inflation increasing to nearly 6 per cent this year," he said.

Even if the rates rise by 1 per cent, home-buyers have to shell out 6 per cent to 7 per cent more in monthly payments, he said.

Property Perfect has launched a campaign with four banks - TMB Bank, Krung Thai Bank, Siam City Bank and Bank of Ayudhya. Buyers who go for houses till the end of this month will enjoy 2-per-cent interest rate on mortgages for two years.  

It has also tied up with furniture companies Index, SB Furniture and Modern Form to offer 5-per-cent discounts and gift vouchers worth between Bt3,000 and Bt12,000 to buyers, executive manager Vichai Singvicha said.

Prinsiri is offering zero-per-cent financing and a chance to win a Honda Jazz to buyers who go for its Northern Town project.

SC Asset is also offering a promotion package under which buyers going in for seven projects - under the Bangkok Boulevard, Citric Scene and Vista Avenue brands - will get discounts of up to Bt1 million on June 15, which is being promoted as "SC Day".

      At a glance

n Firms are offering loans at fixed and variable rates to buyers.

n They are also offering

incentives such as discounts and gift vouchers at shops.

n Promotional events and lucky draws are also in the offing.