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Housing loan company set to lower lending rates

The Housing Finance Corporation (HFC) said on Monday it was poised to lower lending rates while also announcing the imminent roll-out of three new financing schemes.

The HFC’s director-general Andreas Georgiou told lawmakers the organisation planned to reduce its lending rates due to competition from the private banking sector.

The organisation would be cutting lending rates during the week, he added.

Meantime the HFC is preparing to unveil three new lending schemes, relating to housing, college studies and renovation works aimed at upgrading buildings’ energy efficiency.

The home ownership scheme will target young couples and will feature an adjustable rate: 2 per cent for the first five years, going up to 2.7 per cent after that.

Officials said the HFC is projected to return to profitability in 2020.

There are currently some €300m in non-performing loans (NPLs) on the HFC’s balance sheet. This figure has remained stable since 2014, officials said.

NPLs account for 46.5 per cent of the HFC’s total loans portfolio.

The organisation’s capital adequacy ratio is 19.38 per cent, higher than the 16 per cent threshold required by regulators.

The HFC was established by the state in the early 1980s to facilitate access to mortgages, particularly to vulnerable groups. It grants loans to families to obtain their first home and to low-income groups on favourable terms.

 

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