Deposit on second home no longer required

Prospective homeowners will no longer be required to put down a deposit should they want to purchase second homes, following the relaxation of loan-to-value (LTV) ratios by the Bank of Namibia (BoN). The central bank relaxed the LTV ratios owing to shifts in Namibia’s property market, it said. The LTV represents the amount of money lent to a borrower by a banking institution to purchase a property in relation to the property&#039;s price or valuation, and the deposit required from the borrower.According to the BoN, the new regulation provides for a further relaxation of LTV ratios, particularly concerning additional property purchases. As such, a mortgage loan for a second residential property no longer requires any deposit, while mortgage loans for third and subsequent residential properties only require a 10% deposit.Recent economic conditions and shifts in the Namibian property market prompted these changes, it said. Banking institutions are mandated to establish comprehensive policies and procedures to ensure adherence to the LTV restrictions outlined in the regulations. Fostering investmentBoN deputy governor Leonie Dunn said the changes were meant to spur activity in the housing sector. “These regulations mirror recent economic conditions which require a further relaxation while safeguarding financial stability. They are designed to foster investment in the property sector, generate job opportunities and make a positive contribution to economic growth and recovery,” she said. The central bank in 2017 for the first time reduced LTV ratios. At the time, it allowed prospective homeowners to pay a 20% deposit on a secondary home, a 30% deposit on a third home, a 40% deposit on a fourth home, and a 50% deposit on a fifth home. At the time, it said: “This regulation will give prospective first-time home-buyers a better chance of owning a home as they will be exempted from paying a deposit. This means the commercial bank will extend a home loan to the prospective first-time buyer and they will not be expected to pay a deposit".

Deposit on second home no longer required

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Namibian Sun 2025-05-07

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Deposit on second home no longer required

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Namibian Sun 2025-05-07

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