No roll-out date yet for intergenerational mortgage loan
The National Housing Trust (NHT) is still consulting internally on the details of the new intergenerational mortgage product and is yet to set a roll-out date.
The initiative was announced by Prime Minister Andrew Holness in March as a means of making homeownership easier, but some reservations have been expressed from within the mortgage-lending community about the product.
One of those lenders who spoke on condition of anonymity said there might be no need to design a new product, given that more than one person can be registered on a property title and loan tenors or repayment periods can be adjusted to the age and earning ability of the youngest person on the title.
“Additionally, most institutions require life insurance. In other words, the life insurance will kick in on death of mortgagee; or siblings can be registered on a title and assume mortgage payments,” said the lender.
“In fact, financial institutions consider the youngest person registered and their ability to repay, and that may take care of the tenor problem,” he said.
Prime Minister Holness said in his Budget presentation that the intergenerational mortgage programme would be introduced this fiscal year, which ends March 2020.
It would allow for a younger sibling or child to agree to carry the mortgage obligation, subject to affordability, when the original holder of the mortgager retires or dies.
Under the programme, the mortgage loan repayment period could extend to 60 years.
Asked for examples of how the loan would be structured and the budget set aside for its execution, NHT Manager for Corporate and Public Affairs Dwayne Berbick said the programme was still in the incubator stage.
“Please note that while the Intergenerational Mortgage Programme was announced, it has not yet been implemented as we continue to work through the parameters of the programme. The effective date for the programme is to be announced as we continue with our consultations,” he said.
Berbick adds that the details of the programme would be made public when its ready for implementation.
Holness said a maximum of 10 per cent of NHT’s constructed housing solutions would be accessible under this programme in the initial stages.