Cathay Life to raise rates, 1st for private institution
By Ted Chen ,The China Post
May 27, 2014, 12:10 am TWN
Cathay Life Insurance (國泰人壽) yesterday stated that it would be raising home mortgage rates by 0.05 percent, making it the first private sector financial institution to follow in the footsteps of similar announcements by a number of state-run banks including the Bank of Taiwan (台銀) and the Land Bank of Taiwan (土銀)
Currently, Cathay Life Insurance organizes its clients in three categories. Following the change, fixed mortgage rates for class A clients will be raised to the 1.96 to 2.16 percent range, and 2.06 to 2.26 percent, and 2.26 and 2.66 percent for class B and C clients, respectively. For non-fixed rate mortgages, rates are expected to fall at the 1.94 to 2.06 percent range for class A clients, and 1.96 to 2.16 percent, and the 2.11 to 2.31 percent range for class B and C clients respectively. The company stated that these rates will only be applicable to first-time home buyers, and that clients buying non-primary resident homes will be have an additional 0.25 percent tacked on to their mortgage rates.
The company stated that the decision is spurred by the need to react to changing trends in the market, and its commitment to conform to government policies. In addition, the company emphasized that clients buying their first home will not bear the brunt of the rate hike, as opposed to real estate investors buying subsequent residences.
Cathay Financial Holding's banking arm, Cathay United Bank (國泰世華), however, stated that it remains undecided on whether mortgage rates will be raised. The bank stated that it will reassess the proportion of loans it will extend to speculators buying high-priced homes, but did not provide a timetable.