Beneficiaries of home loans have been placed on alert to
brace for a possible increase in mortgage rates.
The warning comes as local financial institutions respond to the Government's surprise increase in interest rates earlier this week.
The Bank of Jamaica on Monday jacked up the rates on some of its key instruments as it intensified efforts to stem the slide in the value of the Jamaican dollar.
Members of the financial sector said mortgage providers such as banks and building societies will be forced to pass on the increase to their customers.
Financial Analyst David Wan says this will affect existing and new mortgages.
"Both because one of the things that is not well known is that the majority of the mortgage loans made by financial institutions are variable rate and they have the right to change the rate. While in the US they have clearly defined fixed 30-year or 15-year...the majority of the mortgages are adjustable," said Mr. Wan.
He said National Housing Trust borrowers are not likely to be affected by the hike.
The business sector has been expressing alarm at the decision to increase interest rates amidst fears that it will have a damaging effect on the already weak economy.
The warning comes as local financial institutions respond to the Government's surprise increase in interest rates earlier this week.
The Bank of Jamaica on Monday jacked up the rates on some of its key instruments as it intensified efforts to stem the slide in the value of the Jamaican dollar.
Members of the financial sector said mortgage providers such as banks and building societies will be forced to pass on the increase to their customers.
Financial Analyst David Wan says this will affect existing and new mortgages.
"Both because one of the things that is not well known is that the majority of the mortgage loans made by financial institutions are variable rate and they have the right to change the rate. While in the US they have clearly defined fixed 30-year or 15-year...the majority of the mortgages are adjustable," said Mr. Wan.
He said National Housing Trust borrowers are not likely to be affected by the hike.
The business sector has been expressing alarm at the decision to increase interest rates amidst fears that it will have a damaging effect on the already weak economy.
All feeds
