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NMB Bank launches employer-assisted mortgages

13 Jul, 2018 - 00:07 0 Views
NMB Bank launches employer-assisted mortgages

eBusiness Weekly

Enacy Mapakame
Financial services firm, NMB Bank has stepped up efforts of bridging the housing gap through its employer assisted mortgage scheme, as it moves to provide affordable housing financing to Zimbabweans.

This comes as demand for housing in Zimbabwe has ballooned due to population growth in urban centres, driven by the rural to urban migration.

NMB Bank mortgages manager James Muchedzi said the scheme allows employers to invest with the bank, which in turn will provide mortgages to the company’s employees.

Based on the level of the investment held with the bank, bond registration, transfer or valuation fees and other costs may be factored in.

According to Muchedzi, the NMB Bank employer-assisted mortgage scheme is cheaper due to low interest rates relative to market rates and a deposit waiver.

The average mortgage interest rate is currently at 12 percent per annum. Under the NMB Bank employer-assisted mortgage scheme, preferential rates can be negotiated.

Additionally, the employment years which is normally up to 15 years can be up to 20 years.

“With NMB Employer-Assisted Scheme no deposit is required as the investment acts as a deposit and liquidity support. The mortgage is secured by the employer’s investment and mortgage bonds. The bank is prepared to incorporate bond registration, transfer fees and valuation fees in the mortgage loan subject to the limit within the value of the property.

“The interest rate is negotiated and related to the size of the employer’s investment and the relationship the bank has with the employer,” he said.

For employers, the scheme promotes staff motivation and retention by facilitating mortgage loans for staff without the organisation having to administer such loans itself, while it affords employees mortgages and cheaper rates.

Employers can invest the full amount that is 100 percent, which that employees require to purchase or construct houses. They can invest half or a quarter of the required mortgage loan or purchase price.

In the event that the investment is less than 100 percent of the mortgages requirement, NMB Bank provides funding for the difference.

If the employer is unable to make the investment, the company’s pension fund can, with the approval of regulator, Insurance and Pensions Commission (IPEC), facilitate the investment for the purpose of mortgage lending.

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