Prime Minister Bruce Golding recently announced changes in the interest rates for some National Housing Trust (NHT) customers.
Below are examples of how a mortgagor's monthly payments can be affected by the interest-rate changes as of June 1.
According to an advertisement in The Sunday Gleaner recently, the NHT said it has always subsidised peril-insurance charges to its customers. The NHT said it intends to continue this subsidy but will do so at a reduced level.
Effective April 1, mortgagors now experience a yearly increase in amounts charged for peril insurance as the NHT gradually adjusts its subsidy levels. The NHT noted that it was in the process of writing to mortgagors to advise them of the changes to their insurance payments as a result of these adjustments.
Existing mortgagors repaying loans at five per cent will start paying at six per cent.
Existing mortgagors now repaying at six per cent will begin paying at eight per cent.
New mortgagors whose income places them in the six per cent and eight per cent interest-rate bands will be required to pay at these new rates.
Example 1
The mortgagor has a 25-year loan of $3.2 million.
At the old five per cent rate:
Monthly payments (including peril insurance): $22,158.24
At new six per cent rate:
Monthly payment (without changes to peril and life insurance): $24,217.49
Change: $2,059.25
Example 2
The mortgagor has a 25-year loan of $3.5 million.
At the old six per cent rate:
Monthly payment (including peril and life insurance): $26,489.02.
At the new eight per cent rate:
Monthly payment (without changes to peril and life insurance): $31,316.99
Change: $4,827.97
