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Thailand: Bank puts focus on refinanced mortgages
TMB Thanachart Bank (ttb) plans to focus on refinancing mortgage loans due to higher demand for this product amid rising interest rates.
Following the Bank of Thailand’s recent policy rate hike, prime lending rates are set to gradually increase. Demand for refinanced housing loans is expected to rise, so ttb will focus more on this area, said the lender’s president Thakorn Piyapan.
The refinancing strategy will provide the bank with more opportunities to expand the loan product and help customers ease their financial costs, he said.
The bank offers an annual fixed interest rate of 2.75% for the first three years of a refinanced mortgage loan. However, the bank has cancelled fixed-interest rate packages for new mortgage loans.
This year ttb aims to grow its new housing loans to 66 billion baht, a year-on-year increase of 32%. The lender has granted housing loans worth 28.3 billion baht since the start of 2022.
The bank’s total housing loan portfolio stands at 310 billion baht, of which 81% are new loans provided to both new and second-hand home buyers. Another 13% is for refinanced mortgage loans, while the remaining 6% represents a home-for-cash product.
Mr Thakorn said the bank aims to increase the home-for-cash product’s proportion to 15% of the total housing loan portfolio over the next five years. By that time, ttb expects an overall mortgage loan portfolio of around 500 billion baht.
“From now on, both the refinanced mortgage loan and the home-for-cash loan have high growth potential, in line with the business cycle and the interest rate trend. Normally, homebuyers will seek refinancing to lower financial costs amid the upward trend of interest rates,” he said.
Due to the country’s high level of household debt, ttb will also concentrate on helping borrowers manage their debt through several solutions.
The bank has introduced a new mortgage loan product called ttb cyh cash cards.
Under this product, loan applicants can opt to have some funds transferred to bank accounts and the rest transferred to the cash cards. They can also have the whole loan transferred to the cash cards.
The bank aims to issue 5,000 cash cards with a loan amount of 2 billion baht under the new product this year. The new product will also facilitate refinanced mortgage loans as well.
In addition, Mr Thakorn said the bank continues to use its debt consolidation programme to help existing individual clients who have suffered from the impact of the pandemic and higher costs of living.
Source: https://www.bangkokpost.com/business/2371086/bank-puts-focus-on-refinanced-mortgages