Let’s talk interest rates!
It’s common to pay close attention to interest rates when evaluating mortgage options. After all, the interest you’ll be paying represents the cost of taking on a mortgage to achieve home ownership.
Many homeowners are enticed by the low interest rates offered by banks these days but, what they may not realise is that these rates will vary throughout the duration of the mortgage. These variable interest rates are reviewed annually and may change on the anniversary date every year. They are impacted by market conditions and are based on the Mortgage Market Reference Rate (MMRR), a benchmark that is designed by the Central Bank of Trinidad and Tobago. These low introductory rates are often used to get you to sign on the dotted line now with little to no recourse in the future. Therefore, the interest rate that your banker quotes you today may not be the interest rate that you’ll be paying 3, 5, or 10 years from now.
We do things differently at TTMF. The interest rates we offer are transparent and stable. Our interest rates are not impacted by the MMRR so our customers are able to stay in control of their mortgage payments. We openly advertise our three (3) mortgage financing interest rates and the parameters that go along with qualifying for each of them.
Here’s a quick breakdown of the interest rates we offer:
Open Market Rate
We have an open market rate (currently at 6%) which we offer to any person who does not meet the criteria set forth to qualify for the 2% or 5% government assisted mortgage programmes. If you are purchasing your home, buying land, or using the equity in your home to finance other goals, we offer the open market rate. Since we were established in 1965, this interest rate has trended downwards. At first, it was at 9%, then at 8% and was later reduced to 7%. In 2019, it was decreased further to 6%. While this interest rate does change with time, customers whose mortgage was approved at the open market rate would not be affected by any subsequent changes so they do not have to worry about the potential of their interest rate increasing throughout the mortgage term.
We also offer, through the Government Assisted Programme (GAP), an introductory interest rate of 2% for first time homeowners who are looking to purchase a property valued at $1M or less and whose monthly income is $14,000 or less. This interest rate increases by 0.5% every year on the mortgage anniversary date until it gets to 5%. It does not increase any further than 5% for the rest of the mortgage period.
There is also another GAP mortgage option which offers an interest rate of 5% to first time homeowners who are interested in purchasing a property valued up to $1.5M whose monthly income falls between $14,001 and $30,000. This interest rate increases by 0.5% every year on the mortgage anniversary date until it reaches the current TTMF open market rate, which is 6% at present. Once it gets to the open market rate, there are no further increases.
While our interest rates may not be fixed, we take pride in knowing that they are stable. Even though the 2% and 5% interest rates increase over time, they are measured increases that homeowners can account for from the beginning of their mortgage. Therefore, they can plan for the increase in mortgage payments, whereas, homeowners whose mortgages have variable interest rates may be caught off-guard by an increase. Some homeowners have found themselves in situations where their income has not increased in line with their mortgage payments and therefore, they struggle to maintain their desired standard of living. Some are even faced with the unfortunate reality of losing their homes if they can’t keep up with payments.
How TTMF can help
Don’t be misguided by low introductory interest rates. Remember, a mortgage is a long-term agreement so it’s important to consider your likely total investment over the duration of the mortgage. Our stable interest rates provide you with the long-term security that you expect from becoming a homeowner. Let’s have a chat. We want to help you realise your dream of home ownership and we’ll always do our best to help you manage your payments so you can keep your home.
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