Press Release

Riyadh, Saudi Arabia, 28 February 2023: The Saudi Real Estate Refinance Company (SRC), wholly owned by the Public Investment Fund (PIF), has announced that it will be lowering the mortgage benchmark curve (the Long-Term Financing Rate –LTFR-) by 26 basis points for mortgage tenors from 20 to 30 years. The rates for mortgages shorter than 20 years is maintained.

By reducing the long end of the mortgage rates in a rising global interest rate environment, SRC continues to support the development of a robust mortgage market and its liquidity, continuously providing affordable and accessible financing options to Saudi citizens.

This sensible reduction in LTFR mortgages is expected to be positive for housing demand in Saudi Arabia and will further support stable financial market conditions and the financial sectors contribution to the overall GDP growth.

Fabrice Susini, CEO of SRC said: "Our commitment to supporting the sustainable growth of the housing market in Saudi Arabia stems from our mission statement and from the recognition of its critical role as a key contributor to the country's economic development.

We are dedicated to providing accessible and affordable financial solutions to the public, while aligning with the strategic objectives of Vision 2030’s Housing Program. This reduction in longer tenor of the LTFR mortgages, which actually reflects the observations of the rates, is a testament to our commitment to enhancing sensibly market liquidity, providing capital and risk management solutions to originators and lenders, and increasing home financing affordability to support access to homeownership for Saudi citizens.

The LTFR mortgage curve was introduced in 2018 as a benchmark for long-term fixed rates mortgages to stabilize the residential real estate sector in the Kingdom and to protect borrowers against interest rate volatility. We believe that this reduction that comes on top of our extension of the benchmark from 25 to up to 30 years tenor, will contribute to maintain the demand for affordable housing and to support the real estate industry's growth, thus contributing to the overall economic development of the Kingdom."

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