It will be the third time the GHB, the country's largest mortgage lender, has cooperated with the Social Security Fund, GHB president Khan Prachuamoh said yesterday.

The deal being offered this time is 2.5 per cent interest per year over five years, or a five-year fixed rate.

Eligible borrowers must first obtain approval from the Social Security Fund and then seek  approval from the GHB, based on the applicant's ability to repay the loan.

The loans will be up to 80 per cent of house prices.

The new package is expected to be popular among members of the Social Security Fund, although the two previous cooperative schemes between GHB and the fund were not as successful as expected.

The fund set a ceiling for total loans of only Bt5 billion in the previous schemes and only 10,000 applicants got loans.

However, this time there is no ceiling for total loans and, with interest rates still climbing, the offer is expected to attract large numbers of homebuyers to the GHB.

Khan said the bank is able to offer lower interest rates because the fund deposits its money with the GHB, thereby reducing the bank's costs.

He conceded that rising interest rates have meant an increase in the GHB's cost of funds, so the bank has to charge its ordinary borrowers more.

He also said that if the government wants to provide low-interest loans for state officials, there must be a cheap financing source for the GHB.

Khan advised that homeowners who are not members of the Social Security Fund should choose either five-year or 10-year

fixed-rate mortgages, which will help them reduce their repayment costs when interest rates are on the rise.

Khan said the GHB's loans this month amount to Bt8.5 billion, down from Bt10.7 billion in the same month last year.

Rising interest rates and soaring oil prices have contributed to the lending slowdown, he said.

As a result, the GHB may revise down its lending target for this year from between Bt115

billion to between Bt90

billion and Bt100 billion.

Wichit Chaitrong

 The Nation