PM appeals to banks not to raise interest rates for property buyers

Prime Minister Robert Abela has appealed for banks to refrain from following in the HSBC bank’s footsteps in raising interest rates for property buyers.

Abela commented on a story reported by Times of Malta, which read that HSBC bank has doubled its minimum home loan down payment and increased interest rates for a home loan.

The bank now requires first-time buyers to provide 20% of the property value upfront when applying for a loan. Previously, it accepted minimum down payments of 10%, the Times reported. Information on HSBC’s website also shows that the bank has increased its interest rates for such loans, with first-time buyers now being charged an annual percentage change rate of 3.1% over the term of their loan, as opposed to the 2.7% the bank previously charged, the newspaper said.

Asked about this during a press conference granting €1,000 to first-time buyers each year for a period of ten years, Abela said that there are a number of other banks in the country who did not raise their interest rates or increase the minimum down payment. He said that he had only learnt about the changes on Thursday.

“Buyers who are looking into a home loan have other alternatives, and at the same time, I appeal for other banks to refrain from doing what HSBC has done,” Abela commented.

In a company announcement, HSBC Malta said: “With reference to recent reports in the local media referring to a change to HSBC Bank Malta p.l.c.’s (‘the Bank’) home loan terms and conditions. The Bank would like to clarify to the market that it continues to offer home loans in line with its proposition up to a maximum of 90% Loan-to-Value, while continuing to align to its risk appetite and credit criteria. The Bank’s official has been updated to this effect.”