SRC cuts long-term fixed-rate mortgages by 26 bps

Logo of Saudi Real Estate Refinance Co.

Saudi Real Estate Refinance Co. (SRC), a wholly-owned unit of the Public Investment Fund (PIF), reduced its long-term fixed-rate (LTFR) mortgages with 20 to 30-year maturity terms by 26 basis points (bps), according to a company statement.

Rates for mortgages maturing in less than 20 years, however, were maintained.

LTFR is the benchmark for mortgage rates in the Kingdom.

The move aimed at encouraging fair pricing, increasing awareness among beneficiaries and supporting the Saudi families to own houses. This is by determining a benchmark that will help boost demand for mortgages across the Kingdom and protect beneficiaries from price volatility.

In addition, such a reduction will likely impact industry growth in a positive manner, enhance market stability and maintain the financial sector’s contribution to the Kingdom’s gross domestic product (GDP).

The step is in line with the company’s commitment to foster the sustainable growth of the housing industry in the Kingdom, said CEO Fabrice Susini.

He added that the move would further help provide liquidity as well as capital and risk management solutions. It would also support the offering of diverse real estate financing solutions, aligned with profit margins, aiming to boost Saudi homeownership.