WINDHOEK – In a move to ease the financial burden on property investors, the Bank of Namibia (BoN) has announced a significant relaxation of loan-to-value ratios for the purchase of multiple homes through mortgage bonds.
According to Namibia Press Agency (Nampa), this change comes as part of a new regulation implemented by the Minister of Finance and Public Enterprises, effective from 31 October 2023. This regulation amends the loan-to-value ratio, which measures the loan amount a bank lends to a borrower against the property’s value. BoN Director of Strategic Communication and International Relations, Kazembire Zemburuka, stated that the latest regulations supersede those from 2019, removing the deposit requirement for the mortgage loan on a second residential property and reducing the deposit to 10 percent for third and subsequent properties.
The decision, influenced by recent economic conditions and shifts within the Namibian property market, mandates banking institutions to establish stringent policies ensuring compliance with the new loan-to-value restrictions. Deputy Governor Leonie Dunn of BoN highlighted the benefits of the regulation, saying it is expected to stimulate investment in the property sector, create jobs, and contribute to the economic growth and recovery of Namibia.