Siam Commercial Bank has launched a special mortgage campaign for buyers of new homes aimed at addressing their liquidity shortage in the first year.
Borrowers can pay monthly instalments of as a little as Bt1,000 in the first year for each Bt1 million taken out. A special interest rate of 1 per cent is also on offer during the period.
"In the first year, normally buyers shoulder a high cost as well as unexpected expenses. We want to help address their liquidity problem and allow them to save more," Rungruang Sukkirdkijpiboon, SCB executive vice president, said yesterday.
Under a normal home loan of Bt2 million, a borrower has to pay a minimum monthly instalment of Bt13,000 Bt14,000. But under the bank's campaign, they need pay only Bt2,000 per month.
Rungruang said the offer would be the highlight of the bank's homeloan products over the remainder of the year, as it should encourage homebuyers to make quicker decisions on financing.
SCB believes housing prices will rise at least 5 per cent next year because of higher construction costs, while interest rates are on an upward trend.
Clients of about 1,000 residential projects can join the campaign, and SCB hopes to attract applications from about 70 per cent of them.
"Each bank's savings interest rates are the same, but cash flow is essential to homebuyers. We have therefore created the programme to help clients have more savings, instead of offering them a zero interest rate," he said.
The campaign runs until December 30.
SCB expects its new mortgages this year to total more than Bt65 billion, taking its outstanding home loans to Bt300 billion by year end.
Mortgage extension is part of SCB's retail banking segment, in which it is the market leader. Its overall retailbanking loans are expected to reach Bt400 billion this year, while corporate banking is expected to come in at the same level, said senior executive vice president Yol Phokasub.
Rungruang said the bank next year would focus on developing auto finance and speedycash products, which also form part of its retailbanking business.
It is not the market leader in these products, but will promote them aggressively because of the economic recovery.
"We have been more cautious about providing speedycash loans, but the rapid economic recovery is a good sign for SCB to promote these products strongly next year," he said.