Early loan decision advisable

Home-buyers who are considering financing should perhaps make a decision soon, as mortgage rates are expected to rise further this year along with overall interest rates.

For those who really need to own a new home with a bank loan, the following information on home-loan rates from several commercial banks may be useful for your decision-making.

Kasikornbank, which raised its mortgage interest rate by 50 basis points on June 23, offers a loan fixed for the first three months at 1 per cent with six rate choices for borrowers to choose from thereafter.

The first choice offers a fixed rate of 4 per cent for the following nine months, the second one offers a fixed 5.75 per cent for the next 21 months and the third is 6.25 per cent for the next 33 months.

The fourth-to-sixth choices offer a floating rate at the minimum lending rate (MLR) minus 2.75 percentage points for the next nine months, the MLR minus 0.75 point for the next 21 months and the MLR minus 0.50 point for the next 33 months, respectively. After that customers will be charged at the MLR, currently 7.25 per cent.

The bank will loan up to 80 per cent of the appraised value of the residence. The campaign runs until September.

Bangkok Bank (BBL) also offers up 80 per cent of the appraised value with three types of interest rates. The first type offers a fixed rate of 3.25 per cent in the first year and the MLR after that. The second type offers 5.25 per cent in the first two years and then the MLR. The third offers the MLR minus one percentage point in the first three years and the MLR from the fourth year on.

Krung Thai Bank (KTB) offers two choices. The first one is 4.25 per cent for the first year and the MLR minus 0.25 of a percentage point after that, while the second choice is 4 per cent in the first year and then the MLR.

The MLR of BBL and KTB is the same as that of Kasikornbank, at 7.25 per cent.

Siam Commercial Bank charges a higher rate with two choices. The first one is a 4-per-cent fixed rate in the first year and the minimum retail rate (MRR), currently 7.75 per cent, plus 0.25 percentage point. The second offers the MRR minus 1.75 percentage point in the first two years and the MRR plus 0.25 of a percentage point after that.

Siam City Bank (SCIB) offers its home-loan customers a 3.99-per-cent interest rate in the first year, going to the MLR minus 0.5 of a percentage point thereafter. The MLR of SCIB is now 7.5 per cent.

If borrowers also buy life insurance, they will be offered a 100-per-cent credit line for the premium and have 0.25 of a percentage point taken off their mortgage rate for the first year.

If a customer buys a unit in a project financed by the bank, they will be offered the special rate of 3.25 per cent in the first year, 4.5 per cent in the second year and the MLR minus 1 percentage point after that.

If the customer prefers a floating rate, they can choose the MLR minus four percentage points in the first year and the MLR minus three percentage points in the second. After that the borrower must pay the MLR minus one percentage point.

The third choice offers a rate fixed at 0.99 per cent for the first nine months and after that the MLR minus one percentage point.

These special rates will be available until next month with a waiver of closing and appraisal fees. The bank offers a maximum loan at 95 per cent of the appraised value.

Bank of Ayudhya provides maximum credit at 100 per cent of the appraised value for a new home with four interest-rate packages.

Customers who also take out a life insurance policy can take advantage of a 3.25-per-cent mortgage rate in the first year and the MLR minus 0.25 of a percentage point after that. Or customers may choose zero interest in the first three months, 4.5 per cent in the next nine months and the MLR minus 0.25 of a percentage point thereafter.

Customers who do not buy life insurance will get a 4-per-cent mortgage rate in the first year and the MLR minus 0.25 of a percentage point afterward. Or they may choose zero interest in the first three months and 4.75 per cent in the next nine months, and the MLR minus 0.25 of a percentage point thereafter.

TMB Bank provides its mortgage customers a 3.99-per-cent interest rate in the first year, 5.5 per cent in the second and the MLR minus 0.75 of a percentage point afterwards.

TMB's MLR stands at 7.5 per cent.

Among foreign banks, Standard Chartered Bank (Thai) offers 1.99 per cent in the first year and from the second year onwards it charges the minimum housing rate (MHR), now 7.15 per cent, minus 0.75 of a percentage point.

United Overseas Bank (Thai) also cross-sells its mortgages with life insurance. Policyholders can enjoy a 0.99-per-cent rate in the first three months and 3.49 per cent in the next nine. The rate changes to the MLR minus 1.18 percentage points for the rest of the term, but not lower than 5.25 per cent.

Other customers will have to pay 1.59 per cent in the first three months, after which the rates and terms are the same as for policyholders.

These rates will be effective until September.

Kannikar Chalitaporn, president and CEO of Siam Commercial Bank, said last week that by year-end interest rates might be up 50 basis points, which would take the yield curve higher and cause banks to raise the deposit rate by 50 basis points and the lending rate by 25 basis points.

The mortgage rate might also follow, she added.

      At a glance

nMortgage rates of most banks are expected to rise in the second half of the year.

nKasikornbank offers a fixed mortgage rate in the first three months at 1 per cent and provides six choices for borrowers to choose from thereafter.

nBangkok Bank offers a maximum credit line at 80 per cent of the asset evaluation price, with three types of interest rate.

nKrung Thai Bank offers two choices.

nThe minimum lending rate of Bangkok Bank and Krung Thai Bank is the same as Kasikornbank's, at 7.25 per cent.

nSiam Commercial Bank charges a higher rate, with two choices.

nBank of Ayudhya provides the highest maximum credit line at 100 per cent of the asset evaluation price.