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JAMAICA | Prime Minister announces new benefits for NHT contributors

Featured Prime Minister Andew Holness in Parliament Prime Minister Andew Holness in Parliament
KINGSTON, March 20, 2019 - Prime Minister Andrew Holness has announced an increase in the limit for loans to National Housing Trust (NHT) contributors by $1 million; a raise the ceiling for construction loans, and a reduction in interest rates for all contributors.
 
The benefits were outlined by Prime Minister Holness in his contribution to 2019/2020 Budget Debate in the House of Representatives on yesterday.

Holness told the House that the NHT’s minimum income band is to increase from $12,000 per week to $15,000 at the same zero per cent interest rate, “thereby allowing more persons to access the home grant”.

As a result, other income bands will be revised upwards and attract lower interest rates. Holness indicated, as an example, that a beneficiary who falls within the revised $32,001-$42,000 weekly income range and has a $5.5-million mortgage now pays six per cent interest, calculated at $38,144 per month.

The greatest reduction in mortgage payments will accrue to persons earning between $30,000 and $40,000 per week who will get a three per cent cut because of the combined impact of a shift in the upper limit of the income band as well as the one per cent mortgage rate decrease. 
 
Mortgagors whose income range between $12,000 and $15,000 weekly will benefit from a two per cent reduction.

Holness, in explaining the increase in the limit for NHT construction loans, said approximately 65 per cent of contributors who benefit under the service lot programme have indicated that the amount they receive, typically between $2 million and $2.5 million, was inadequate for housing construction.

“With more than a half of all NHT lots yet to be built on, the NHT proposes increasing the construction loan limit for NHT-serviced lots in an effort to stimulate activities in this area,” he reasoned.

Holness also unveiled the NHT’s newest initiative, an intergenerational mortgage programme aimed at allowing younger siblings or the child of a beneficiary to agree to carry the mortgage obligation – subject to affordability – when the older mortgagor retires or dies.

The aim is for a younger sibling or child to agree to carry the mortgage obligation, subject to affordability, when the older mortgagor retires or dies. They must also agree to allowing the beneficiary to occupy the premises for an agreed time.
 
The loan will be scheduled over a 60-year period. The beneficiary's loan with the NHT will be scheduled to retirement and will include the portion of the costs to be covered during the period from the date of the loan to retirement.
 
For example, if the beneficiary has 20 years to retirement, only a third of the cost of the solution will be factored into the required payment.

“The cycle may be repeated for a second heir to take over the housing solution,” Holness said, adding that a maximum of 10 per cent of all constructed NHT housing solutions would be accessible under this programme in the initial stage.

The prime minister pointed out that the initiatives would cost the NHT $1.2 billion, but said that some of that would be offset by policy change, which, among other things, would allow the trust to transfer unclaimed contribution refunds to income 10 years after they become due.

  • Countries: Jamaica

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