TAIPEI (CNA) — The average tenure of loans granted for the purchase of residential properties in Taiwan in the first quarter of this year hit a record high of 269 months (around 22.4 years), according to statistics from the Ministry of the Interior (MOI).
Meanwhile, the average interest rate on new housing loans was 1.79 percent and the loan-to-value ratio averaged 62 percent, according to the MOI statistics.
Among the six biggest municipalities, the longest loan tenure was recorded in Kaohsiung, with an average of 278 months, followed by 277 months in Tainan. The average tenure in New Taipei was 274 months, and 262 months in Taipei.
Although soaring housing prices place a heavy burden on home buyers, lower interest rates mean some home buyers are more willing to stretch out loan repayments over a longer period in order to secure enough money to enjoy daily life, said Ho Shih-chang (何世昌), a research manager at real estate magazine My Housing.
Hsu Chia-hsin (徐佳馨), head of the research department at real estate sales agent H&B Business Group, said that in the past, high interest rates tended to encourage people to repay mortgages faster.
However, mortgage rates continue to fall to record lows, lowering the cost of home buying and giving buyers more options to leverage their money in investments or maintaining a high quality of life, according to Hsu.
Ho indicated that the repayment tenure is likely to increase unless mortgage rates spike or housing prices slump, while Hsu said banks are expected to offer longer-term loans for relatively new residential properties in the near future.