The mortgage finance expert and member of Egyptian Association for Mortgage Federation, Mohamed Samir, has said that the property guarantee financing programme is one of the most popular and innovative mortgage financing programmes in Egypt. The programme, which is regulated by the Mortgage Finance Law No. 55 with its amendments issued in 2014, allows customers who already own a property to obtain instant cash financing of up to 80% of the current market value of the property, and repay it over a period of up to 15 years.
Samir explained that the programme is based on the normal mortgage financing system, which provides financing for buying, building, or finishing a property. The difference is that the customer does not need to provide any additional guarantees to the financing party, except for the ownership of the property. This way, the customer can turn his unused and unexploited property into a financial portfolio and an immediate cash flow. The customer can also sell or rent the property as a source of income, while retaining the ownership and benefiting from the increase in its market value.
Samir added that the programme has many advantages for both the customers and the financing parties, especially in light of the current economic crisis. He said that the programme provides immediate cash liquidity in periods not exceeding 10 to 15 days, and that the interest rate offered by the programme is variable and linked to the Central Bank of Egypt (CBE) pricing. This means that if the CBE reduces its lending and discount rates, the customer will pay lower installments.
Samir revealed that 70% of the financing currently available within mortgage financing companies is represented in the property guarantee financing programme. He said that this programme has gained more attention recently, as it has become the ideal solution for many customers who need cash financing without selling their properties. He also said that this programme reflects a new and innovative way of dealing with the mortgage financing system in Egypt.
