The Minister of Finance and Public Enterprises, Iipumbu Shiimi has issued new regulations that scrap the requirement for a deposit when seeking a mortgage loan for a second residential property.
Mortgage loans for third and subsequent residential properties will now only require a 10% deposit, according to the new regulations, which came into effect on October 31, 2023.
“The new regulation provides for a further relaxation of Restrictions on Loan-to-Value (LTV) Ratios, particularly concerning additional property purchases. As such, a mortgage loan for a second residential property no longer requires any deposit, while mortgage loans for third and subsequent residential properties only require a 10% deposit,” Bank of Namibia Director of Strategic Communications and International Relations, Kazembire Zemburuka, said on Wednesday.
Zemburuka said the decision comes on the recommendation of the Bank of Namibia.
“Recent economic conditions and shifts in the Namibian property market prompted these changes. Banking institutions are mandated to establish comprehensive policies and procedures to ensure adherence to the loan-to-value restrictions outlined in the regulations,” he said.
BoN Deputy Governor, Leonie Dunn, said the revised regulations offer significant advantages to property owners and prospective property buyers.
“These regulations mirror recent economic conditions, which require further relaxation while safeguarding financial stability. They are designed to foster investment in the property sector, generate job opportunities, and make a positive contribution to economic growth and recovery,” she said.
The latest regulations replace the previously issued Regulations on Restrictions on Loan-to-Value (LTV) Ratios issued in 2019.
