Interest-ing development: Ministry slashes housing loan rates

The Ministry of Social Development and Human Security announced a significant reduction in housing loan interest rates by 0.5% for one year, aiming to support citizens during challenging economic times.

Minister of Social Development and Human Security, Varawut Silpa-archa revealed this decision at a press conference at Government House at 10am today, May 28.

The Community Organisations Development Institute (CODI) has been collaborating with local cooperatives to provide housing loans to the public at an interest rate of 6%, with 4% from CODI and 2% from the cooperatives.

On May 24, the CODI board, following the minister’s directive, decided to lower the interest rate from 4% to 3.5% for a one-year trial period starting June 1.

If the financial situation permits, the board will extend this measure year by year, meaning that citizens who currently pay a 6% interest rate will see it reduced to 5.5% over the next year.

Additionally, if the cooperatives can match this reduction, the benefits to the public will be even greater.

Varawut emphasised that the 0.5% interest rate reduction is available only to borrowers who have not defaulted on their payments for more than three months and are not involved in legal proceedings.

Approved community credit organisations and cooperatives will implement this measure for one year.

The current interest rate is already the lowest compared to financial institutions nationwide. Varawut anticipates that over 68,000 households, or approximately 200,000 people, would benefit from this initiative, providing much-needed support during the ongoing economic downturn.

The government hopes this measure will ease the financial burden on the public and offer some relief as they navigate through these difficult times, reported Khaosod.

In related news, difficulties in securing home loans have led to a significant decline in housing transfers across the country in the first quarter, reaching the lowest level in six years and marking the fifth consecutive quarter of decline.