0.5% for salaries less than 15,000 dirhams
Banks raise interest on personal and real estate financing
The rate hike came after a period of delay in implementing the Central Bank's decision.
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Banks operating in the country raised the interest rate on personal and real estate loans, some of which started on November 21 and the rest yesterday (Monday), as the rate was increased by 0.5% for personal loans, for those whose salaries are less than 15 thousand dirhams, while it remained the same without an increase. For those with high salaries (15 thousand and more).
According to information collected by «Emirates Today», that the banks raised, yesterday, the percentage of all real estate financing by 0.5%, also without regard to the value of the salary.
The banks had decided to postpone raising the interest rate on loans and various financings for a period of two weeks, in order to complete all transactions and requests pending on their systems, under the procedure, after the Central Bank raised the main interest in early November, by 75 basis points, coinciding with a similar hike it made. The US Federal Reserve, to control inflation, which reached its highest level in the last four decades, at 8.2%.
For his part, the banking expert, Ahmed Arafat, said, "All existing real estate financing installments rose yesterday, as well as new financing, by (0.5%), to reach 4.99%, up from 4.49% last month," explaining that "this raise came after A period of delay in implementing the central bank’s decision to raise the main interest rate by 75 basis points, as all pending transactions have been completed, in addition to studying whether the increase will take place at the same (central) rate or less, which is what actually happened, as the banks settled with an increase of 0.5%, provided that It is fixed for a period of three years in all financings, and then moves with (EIBOR), the interbank lending rate, up and down.
Arafat continued: "This increase in interest has its negatives and positives, as it will inevitably affect the demand for real estate financing, but in return it will increase the supply, and thus lower prices," noting that "whoever has the intention to buy a residential house will not care much about the increase." There are priorities for him, unlike those who can wait to take financing or buy in cash.
For his part, the banking expert, Muhammad Ghazi, said, “Some banks raised the interest rate on personal loans, as of November 21, by 0.5% for clients with salaries of less than 15 thousand dirhams, but those who earn this number or more are not affected. As the percentage remained the same, if they applied for financing.
And Ghazi indicated that “the banks did not implement the recent (Central) decision to raise the interest directly in early November, but they finished all their pending transactions and requests that their contracts were signed, and then they raised.”
He added, "The interest rate on personal loans is currently circulating after the hike, between 5.99% to 7.25%, and it is determined according to the customer's salary, credit history, and his evaluation number."
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