NMB employer-assisted scheme makes home ownership affordable

NMB Bank’s Employer-Assisted Mortgage Scheme enables employers to make it possible for employees to access housing loans at favourable interest rates without having to pay a deposit.

Bond registration, transfer or valuation fees and other costs may be factored into the loan limit, based on the level of the investment held with the Bank

The scheme is based on an arrangement between the bank and the employer, whereby the employer invests with the bank. The bank in return offers mortgages to the company’s employees at negotiated interest rates.

The employers can invest the full amount, that is 100 percent, that employees require to purchase or construct houses or 75 percent, 50 percent or even only 25 percent of the required mortgage loan/purchase price. Where the investment is less than 100 percent of the mortgages requirement, the bank provides funding for the difference.

If the employer is unable to make the investment, the company’s pension fund can, with the approval of the Insurance and Pensions Commission (IPEC), facilitate the investment for the purpose of mortgage lending.

NMB Bank Mortgages Manager James Muchedzi says the benefit of the scheme for the employer is that it promotes staff motivation and retention by facilitating mortgage loans for staff without the organisation having to administer such loans itself.

For the employee, the benefits of being able to own a home without having to pay a deposit or any fees associated with such a purchase and being able to obtain a mortgage loan at a below normal (market) interest rate.

“With NMB Employer-Assisted Scheme no deposit is required as the investment acts as a deposit and liquidity support. The mortgage is secured by the employer’s investment and mortgage bonds. The bank is prepared to incorporate bond registration, transfer fees and valuation fees in the mortgage loan subject to the limit within the value of the property.

“The interest rate is negotiated and related to the size of the employer’s investment and the relationship the bank has with the employer,” he said.

“The ordinary (market) mortgage interest rate is currently 12 percent per annum but under this scheme preferential rates can be negotiated. The repayment period, which normally is up to 15 years can be up to 20 years in the case of the employer-assisted scheme,” Mr Muchedzi said.