Bank Windhoek aggressive on home loans

Bank Windhoek has scaled up a campaign to increase its market share in the housing market segment by offering clients 0% deposit home loans.
The country’s biggest bank based on loans and advances announced this week 100% financing for residential property loans from N$500,000 up to N$1.5 million saying this will make it easier for clients to own their first homes.
Previously, clients were required to pay a deposit of 10% on their first home loan.
With the relaxation of the deposit requirement, Bank Windhoek said it hopes that “more clients will be able to acquire the biggest investment on an asset that one normally makes – owning a home.”
The bank said the 0% deposit requirement applies to home loans between N$500,000 and N$1.5 million as it is rare to find a property that costs less than N$500 000 in today’s market. However, the bank stressed that should a client get a property below N$500,000 or even above N$1.5 million, it might still consider the 0% deposit loan, subject to the bank’s terms and conditions.
The bank also said that financing of a second mortgage will depend on the purpose of the loan and affordability, as well as the valuation of the property.
Although the bank declined to give information on the composition of its loan book as well as information on the number of clients with second mortgages, citing confidentiality, information contained in the bank’s prospectus released when Bank Windhoek issued its IPO in June shows that, as a percentage of total advances, the bank had a 47.8% exposure to home loans as at 30 June 2012.
The scaling up of home loans will likely push the bank’s exposure to home loans to over 50% of total advances, a situation that the central bank has raised concerns about in the past.