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Egypt increases home loan repayment limit to 50%

By Pramod Kumar
Unsplash.com
FRA chairman says the move aims to counter the ramifications of high inflation rates

Egypt’s Financial Regulatory Authority (FRA) has increased the maximum installment limit for mortgage finance schemes up to 50 percent of the purchaser’s income, according to a local media report.

Previously, the maximum limit was set at 40 percent.

This aims to increase the number of beneficiaries from real estate financing, said FRA Chairman Mohamed Farid, adding it will allow homebuyers to pay installments of up to 50 percent of their monthly gross income in mortgage financing.

“The move aims to counter the ramifications of high inflation rates in light of the current economic conditions in the markets,” Farid said.

Farid said that the FRA always seeks solutions and suitable alternatives to enhance the efficiency and competitiveness of the non-banking financial markets, including mortgages.

In July 2021, the Central Bank of Egypt introduced a EGP 100 billion ($4.05 billion) mortgage finance initiative that serves low and middle-income citizens.

Finance mortgage firms provided EGP 4.2 billion in home loans in the third quarter of 2022, up 71.5 percent year-on-year, according to the FRA’s data.

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