Press Release
Riyadh, Saudi Arabia, 03 October 2022 – The Saudi Real Estate Refinance Company (SRC), wholly owned by the Public Investment Fund (PIF) announced that the maturity offering of its long-term fixed rates (LTFR – the benchmark for mortgage rates in the Kingdom) has been extended to 30 years.
By extending the maximum eligibility tenor to 30 years from 25 years previously, SRC will further support the development of a robust mortgage market in the Kingdom, providing longer term liquidity to primary originators. It will allow lenders in the Kingdom more flexibility and the ability to offer more sustainable mortgage solutions to borrowers.
SRC does not directly engage with borrowers however through this offering, they will benefit from lower monthly financial payments and the opportunity to increase the amount of the loan borrowed at a fixed rate over a longer period.
Furthermore, the action taken by SRC will contribute to maintaining the increased sector’s contribution to the national GDP and its diversification.
Fabrice Susini, CEO of SRC said: "When we introduced the LTFR in 2018 with tenors from 10 to 25 years to all originators in the Kingdom, we aimed to increasing the offer of fixed rate mortgages to borrowers and encouraging fair pricing. We initiated our drive to set a benchmark for long term fixed rate to stabilize the real estate sector in the Kingdom and protect borrowers against interest rates volatility.
With the extension of the LTFR offering from 26 years to up to 30 years maximum tenor, we are continuing to demonstrate our commitment to supporting Saudi borrowers
with an attractive solution focusing on stability and affordability in a very challenging environment.
It is worth noting that the decision taken echoes the variety of capital and risk management solutions we offer originators. They allow them to accelerate the delivery of affordable home financing thereby increasing homeownership among Saudi citizens, aligning with the objectives of Vision 2030’s homeownership program and the development of the financial sector in the Kingdom.”
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About Saudi Real Estate Refinance Company (SRC):
Fully owned by the Public Investment fund (PIF), the Saudi Real Estate Refinance Company (SRC) was established in 2017, after obtaining a license to operate in the secondary real estate market by the Saudi Central Bank, with the goal of transforming the local housing market.
SRC enables individuals and entities interested in direct or indirect real estate financing to increase and diversify origination of long-term fixed-rate (LTFR) products.
As one of its primary roles, SRC provides banks and real estate finance companies with liquidity or capital relief, enabling growth in the home financing sector to increase home ownership rates among Saudi citizens. SRC will subsequently aggregate and packages home financing portfolios into mortgage-backed securities to be sold to domestic and international investors.
With a world class management team drawing from international best practice, SRC is uniquely positioned to become the partner of choice for banks and non-bank lenders in the Kingdom.
SRC is rated ‘A’ (positive) by Fitch Ratings and ‘A2’ (stable) by Moody’s Investors Service.
For more information please visit: http://srco.com.sa/
For press enquiries, please contact:
Saudi Real Estate Refinance Company (SRC)
info@srco.com.sa