Mortgage boost on cards for low earners

2012-02-14 11:14

The government’s mortgage default insurance (MDI) scheme, aimed at helping lower-income earners own their own homes, will start operating in the new financial year, it was announced today.

The R1 billion scheme would initially apply to police officers, nurses and teachers, Deputy Human Settlements Minister Zou Kota-Fredericks told reporters in Parliament.

“We have not quantified in terms of numbers, but we know exactly what category [of people] we are talking of – police, nurses and teachers,” she said.

“Professionals who [earn] between R3 500 and R15 000 [a month]. That is the area we are focusing on at the moment.”

The MDI, managed by the National Housing Finance Corporation, is essentially a guarantee fund to encourage banks and the housing sector to advance mortgage loans to those who might otherwise not qualify for such loans.

It fills the gap between those who qualify for government housing subsidies and those who earn enough to qualify normally for a home loan.

Kota-Fredericks conceded that the R1bn “won’t be enough” to accommodate all would-be home buyers, but suggested that once the scheme was up and running successfully, it could be expanded.

According to notes distributed at the briefing, the MDI will allow people who earn between R3 501 and R15 000 a month to “access a subsidy from the provinces of up to R83000”.

This would enable them to secure housing finance of up to R300 000 from an accredited bank.

The MDI would “mitigate the default risk” on mortgage loan repayments to the banks.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.