The nation’s eight major state-run banks extended NT$35.56 billion (US$1.08 billion) in preferential housing loans for first-home buyers last month, up 5.23 percent from NT$33.79 billion the previous month and ending six consecutive months of declines, Ministry of Finance data showed yesterday.
The eight banks approved 4,571 preferential loan applications last month, up 5.49 percent from 4,333 the previous month and also the first increase in six months, the data showed.
The eight banks are Bank of Taiwan (臺灣銀行), Land Bank of Taiwan (土地銀行), Hua Nan Commercial Bank (華南銀行), Taiwan Cooperative Bank (合作金庫銀行), First Commercial Bank (第一銀行), Chang Hwa Commercial Bank (彰化銀行), Mega International Commercial Bank (兆豐銀行) and Taiwan Business Bank (臺灣企銀).
Photo: CNA
The ministry said the increases in the size of loans extended and the number of applications accepted last month was due to the traditional high season for new property deliveries before the end of the year.
Approved, but not-yet funded loans in accordance with related regulations under the Banking Act (銀行法) also helped free up some space for the banks to take on new preferential loan cases, it said.
Under the ministry’s instruction, the eight banks in August 2023 began to provide additional support to first-home buyers through a new mortgage initiative after the banking sector’s average mortgage rate exceeded the 2 percent mark.
The program offers more flexible conditions for loan applications than a previous similar scheme, such as increasing the maximum loan amount from NT$8 million to NT$10 million, extending the loan period from 30 to 40 years, and expanding the grace period for repayment from three years to five years.
Together, the government and the banks subsidize 0.375 percent of the interest rate, allowing people to buy their first home at a favorable interest rate as low as 1.775 percent, with the interest subsidy lasting until July 31 next year.
However, it has also drawn criticism for rekindling a hot housing market, prompting the central bank to introduce new credit control measures and forcing the ministry to crack down on abuses of the favorable loans since July last year.
For the whole of last year, the program approved about 74,000 preferential loan applications totaling NT$575.37 billion, accounting for more than 40 percent of the total new mortgages in the year, ministry data showed.
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