Riyadh, October 17, 2018
Banque Saudi Fransi (BSF) is the latest lender to offer more long-term, fixed-rate (LTFR) mortgages following an agreement signed with Saudi Real Estate Refinance Company today. The announcement of the SRC/BSF memorandum of understanding comes two months after SRC, supported by the Ministry of Housing, created funding for new 15-20-year LTFR mortgage loans to ‘unlock’ the Saudi real estate market. The agreement also covers SRC’s acquisition of part of BSF’s mortgage portfolio which will increase the bank’s liquidity and enable it to offer more home loans.
Sponsored by His Excellency Majed Al-Hogail, Minister of Housing and Chairman of SRC, the partnership was signed by Fabrice Susini, Chief Executive Officer, SRC, and, Rayan Fayez, Managing Director, BSF. The signing was attended by senior executive members from both sides.
“The agreement with BSF,” stated Fabrice Susini, Chief Executive, SRC, “is exactly what we hoped for we would see when we launched our LTFR funding package in August 2018. BSF will now be able to help more Saudis gain access to mortgage products that offer stability and security over the term of the loan.
“The agreement,” Susini continued, “is another step towards of meeting the Ministry of Housing’s (MOH) Vision 2030 goal of having 60% of Saudis owning their own homes by 2020 and 70% by 2030. Having a range of LTFR mortgage products available to consumers from more lenders will make it easier for the ‘average’ Saudi to obtain financing so they can own a home and build equity. LTFR mortgages will help ‘future proof’ monthly payments, giving consumers peace of mind when it comes to their expenses.”
Rayan Fayez, Managing Director and Chief Executive Officer of Banque Saudi Fransi, commented: “The memorandum of understanding between Banque Saudi Fransi and SRC confirms the Bank’s determination to contribute to achieving Vision 2030’s strategic objectives for the housing sector.”
SRC is enabling financial institutions and banks to increase the number, type and length of LTFR mortgages to provide consumers with a high a high degree of predictability and protection from potential interest rate increases. LTFR mortgages mitigate most of the drawbacks resulting from interest rate increases and sluggish economic growth that have made mortgages unattractive or even unaffordable for Saudi citizens.