Updated | BOV, APS say they will make no changes to home loan features

Bank of Valletta and APS Bank have no intentions to change any features on its home loan products after rival bank HSBC Malta announced it will be doubling its minimum down payment and increasing interest rates.

“The Bank has, at this point in time, no intention to change any of the terms and conditions on its home loan products,” BOV said in comments to MaltaToday.

BOV added that it will continue to monitor the state of the residential real estate sector, movements in interest rates and its funding resources, as well as possible changes in regulatory requirements in determining its policies with respect to home loans and other products.

APS Bank's Chief Strategy Officer Liana DeBattista also told MaltaToday that the bank has no plans to increase the home loan down payment, "especially since this is a market close to our heart as a community bank".

And while the bank said it is not planning to revise interest rates on home loans, DeBattista admitted that the interest rate environment has changed dramatically. "We have raised interest rates on deposits to reflect market realities."

"So it is an evolving situation which we shall continue monitoring closely. What is certain is that we shall always keep the customer's needs and priorities central to all our decisions," DeBattista said.

Earlier on Friday it was reported that HSBC Malta will be doubling its minimum down payment requirement for first-time home buyers and also increased its interest rate for home loans.

First-time buyers will instead need to put up 20% of the property value when applying for a loan through HSBC, as opposed to 10%.

They will also be charged an annual percentage change rate of 3.1% over the period of their loan.

HSBC Malta made a public statement later in the day highlighting that it will still offer home loans with its proposition up to a maximum of 90% loan-to-value.

The bank’s decision to increase the minimum down payment was noted by Prime Minister Robert Abela on Friday as he unveiled a Labour Party electoral pledge offering first-time buyers a cash grant of €1,000 per year for the first 10 years as assistance for loan repayments on their property.

Abela urged commercial banks not to follow the lead of HSBC Malta, and also appealed to property developers to not artificially inflate house prices in response to the new assistance scheme.