BNM: High Debt The Reason For Home Loan Rejections
Banks are rejecting housing-loan applications because they involved borrowers with high levels of pre-existing debt obligations, said Bank Negara Malaysia.
The central bank said this in reference to media reports on calls to review the housing loan criteria for potential buyers of affordable houses.
It said such comments made by some parties caused confusion and were not based on facts and accurate information.
The bank revealed that eligible homebuyers continued to have access to financing. In the first five months of 2017, RM40 billion of housing loans were approved to more than 152,000 borrowers.
Three quarters of these borrowers were first-time buyers. The approval rate for housing loans has also been stable at 74%.
Banks have also introduced more flexible financing solutions to improve affordability, such as that offered for PR1MA homes. Outstanding housing loans has continued to outpace overall loan growth, increasing by 8.6% y-o-y to RM493 billion as at end-May 2017.
Bank Negara said the responsible financing guidelines are in place to protect the interests of borrowers by ensuring that those who borrow are within their capacity to honour their financial obligation.