Better home loans for public servants

The government has reduced the interest rate on home loans for civil servants to 11.25%, which means that they qualify for larger loans.

03 January 2020 | Government

Public servants will have a reason to smile after the government lowered the interest rate on home loans under its Home Owners Scheme for staff members qualifying for a housing subsidy.

An internal circular issued by Tuyakula Haipinge, the deputy executive director in the office of the prime minister, stated that the interest rate would be adjusted to 11.25%, which would increase the maximum qualifying loan amount from N$720 000 to N$792 000.

Haipinge said the notice was already implemented in November 2019. According to the circular, the prevailing interest rate for home loans was fixed at 11.50% in 2016.

“This is not a salary package. It is applicable on the housing subsidy. It is for those that participated in the housing scheme,” she said.

According to Haipinge, this was done to bring the subsidy up to par with the interest rate charged by commercial banks.

The mortgage lending rate decreased from 11.50% to 11.25% in August 2019. At the time, Development Bank of Namibia chief executive officer Martin Inkumbi was quoted as saying when the interest rate is reduced, it leads to more profit for the enterprise.

“A reduction in the interest rate charged on loans means borrowers pay a little less than before. Such cash savings can then be used to expand business operations,” he said.

Namibian National Teachers Union (Nantu) secretary-general Loide Shaanika said the adjustment would lessen the burden on public servants with home loans.

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