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Finance & InvestmentSun, 20 Dec, 20

Promoting transparency in mortgage rates on individual lenders’ websites

Promoting transparency in mortgage rates on individual lenders’ websites
Bank of Ghana

The Bank of Ghana produces the Annual Percentage Rates (APRs) of banks in the country periodically. This is done with the aim of promoting transparency in the pricing and provision of credit facilities. The publication of these APRs thus informs the general public about the various rates charged on different loans offered by banks in the country to guide them in their choices of credit facilities. The most recent publication available on BoG’s website is as at September 30, 2019. The data indicates that eight (8) banks offer mortgage loans out of the total twenty-three (23) banks.

But beyond this step towards transparency in APRs by the central bank, how are the mortgage banks promoting transparency in the pricing of mortgage rates at their institutional level? Aside processing fees, stamp duty and other fees, a surf through the websites of these mortgage banks do not indicate a possible rate or range of rates on various mortgage products for prospective-mortgagors.

The prospective-mortgagor would have to visit these lenders in person or sometimes make a phone call to find out the various mortgage rates. Until a housing fair where one or more of these mortgage lenders participates and prospective clients get the chance to find out the various mortgage rates on different mortgage products on the spot, these lenders are reluctant to make it readily available on their websites or even on phone to prospective clients.

Contrarily, a prospective-mortgagor in say UK, before going to a mortgage lender, generally has a fair opinion of the mortgage rate she/he is likely to pay on the intended mortgage product offered by the particular lender- by surfing the website of lenders, the prospective-mortgagor is able to decide whether lender A, B or C offers a good rate on a home purchase loan for first-time buyers.

Information such as maximum loan term, processing fee, stamp duty, LTVs etc are mostly available almost on all the websites or apps of mortgage lenders in Ghana. However, it is time mortgage lenders go beyond this to include mortgage rates (or range of rates) as well on their websites or platforms which are accessible by the public. In my view, this will not only promote transparency but also promote competitiveness and help prospective-mortgagors and other stakeholders make informed decisions such as refinancing. With a click of a button, one should be able to have a fair idea of rates and other fees on mortgage products offered by each lender to make a choice without having to walk into the banking halls of these lenders before the rates could be accessed to make comparative assessment.

 

Source: Sampson Kesse (Real Estate Times Africa)

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