Thursday, January 13, 2011

Maybank launches ringgit-based mortgage facility for UK property

KUALA LUMPUR: MALAYAN BANKING BHD [] expects a take-up of RM60 million within the next six months for the ringgit mortgage facility offered to Malaysians who want to purchase property in London.

The bank's 'Overseas Mortgage Loan Scheme', launched on Thursday, Jan 13, will finance completed or residential and commercial PROPERTIES [] under CONSTRUCTION [] in London Zone 1 to Zone 3 in prime locations such as City of London, Westminster, Knightsbridge, Kensington and Chelsea.

'Key features of Overseas Mortgage Loan Scheme include repayment in ringgit, high margin of financing up to 85%, flexible repayment and long tenure of up to 30 years or 70 years of age whichever is earlier,' it said.

Maybank's deputy president and head of community financial services, Lim Hong Tat said Malaysians would be able to borrow in ringgit for purchase of property in London with the loan taken in Malaysia.

'Borrowing in ringgit will protect customers from currency fluctuations on their monthly loan repayments and savings as the sterling pound is anticipated to rise this year from its current low exchange rate with the ringgit,' he said.

At present, Malaysians purchasing properties in London have to obtain financing from UK based banks and pay the monthly installments in sterling pound and they are exposed to foreign currency exchange fluctuations.

Lim said financing from UK based banks for Malaysian citizens currently was only available for 'buy-to-let purposes', namely, the property must be purchased for investment purposed and not for own occupation.

As for Maybank's ringgit-based mortgage facility, he said it would be offered in the form of term loan, overdraft or a combination of term loan and overdraft.

'We anticipate a take up of RM60 million for this new facility within the next six months. This is in view of attractive property valuation in London and overseas buying interest to peak before April 2011 when the new 5% sales tax is imposed for properties above ''1 million.

'The current strong ringgit against the sterling pound is also another factor that will encourage Malaysians to buy before the anticipated rise at the second half of the year,' Lim said.

Lim said the new mortgage was designed for high net worth customers who were showing increasing interest in buying properties in that part of Europe, due to the favourable currency exchange rate, attractive property price as well as for those who have children studying in the London area.

'London currently offers attractive advantages for property purchase to non residents and the Bank has tied-up with reputable international real estate agencies to assist customers on UK regulations,' Lim said.


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