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Properties remain out of reach for many

PROSPECTIVE Zimbabwean home-owners continue to sing the blues as the present climate of high interest rates on mortgages shows no signs of easing, it has emerged.

Report by Herbert Moyo

Investigations by the Zimbabwe Independent this week show residential properties remain out of reach for ordinary Zimbabweans — except for a few loaded individuals — a situation compounded by the fact that leading building societies are charging high interest rates on mortgages which are only being given for a 10-year period. Traditionally, mortgages were payable over a 25-year period.

Cabs and FBC are among the building societies which re-introduced long-term mortgage lending, which had been suspended in 2008 when the country’s economic meltdown and hyper-inflation eroded both interest income and loanable savings.

A visit yesterday to ZB’s First Street Harare branch showed the building society is not offering any mortgage facilities, something bank officials refused to shed light on.

FBC Building society in Harare said it is currently offering mortgage facilities to assist home seekers to buy properties at the Masotsha Ndlovu scheme in Waterfalls valued at US$130 000 each housing unit, but the stringent conditions attached to the loans automatically disqualify the majority of workers, particularly civil servants who earn around US$350 on average per month.

“You must raise 30% of the US$130 000 as deposit before you come to us,” said one FBC official speaking on condition of anonymity because of company policy that forbids commenting in the media.

“The bank will advance the remainder of the amount as mortgage which you have to repay over a 10-year period with interest at 15% per annum.”

In the case of the Masotsha Ndlovu scheme, the homeowner will have to fork out US$1 800 as monthly repayment, a figure which is way beyond the monthly reach of even those considered high earners.

Similarly, a mortgage scheme run by Cabs targeting low income earners is still way above what civil servants and many other workers can afford because it is only open to those earning a monthly basic salaryof US$750. It also attracts a 15% interest per annum paid back over a 10-year period

“We are currently giving mortgages for low income houses in Budiriro,” said a teller at the building society. “We are giving 75% of the purchase price where the full cost is US$17 000 for a two-roomed house. A three-roomed one costs US$21 000 and a four-roomed house costs US$27 000.”

Failure to service the mortgage payments would lead to the bank repossessing the house or stand.

Cabs MD Kevin Terry was not available for comment but he is on record saying a low deposit base is the reason why there are such stringent conditions attached to mortgages.

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