Monthly home loan repayment lower: BSP

By MARK HAIHUIE
THE monthly loan repayments under the Bank of South Pacific first-home ownership scheme is about K2000 lower than similar products offered by other financial institutions, chief executive Robin Fleming says.
He told The National that this was possible through the “extremely low interest rate” offered in the scheme.
“The 4 per cent interest rate for first-home ownership scheme loans is extremely low. And combined with a 40-year term, it means that a monthly loan repayment for a scheme loan of K400,000 is around K1670 per month, or K2300 less per month than an a standard loan offered at other commercial banks,” Fleming said.
Fleming said options on reinvestment were created through progressive payments of the loan that could be undertaken by home-buyers.
“As people reduce the outstanding balance of their housing loan over the years, their personal equity in the house usually increases,” he said.
“This gives people options. As they approach retirement, they may choose to sell the property, repay any outstanding loan balance and use their equity to supplement their superannuation income in retirement.
“Alternatively, they may with their children, decide to continue repaying any outstanding loan even after retiring and eventually have a valuable asset that they can pass onto their children.”
The BSP loan scheme is a partnership with the Government which began in 2014.