The Eden Heights Apartments
Minister for Works & Housing, Samuel Atta-Akyea, says the current mortgage regime in the country lacks credibility.
He said that the country’s current mortgage regime does not allow average Ghanaian workers to use 30 per cent of their incomes to settle mortgage debts.
The minister explained that pragmatic measures must be put in place to provide affordable housing to assuage the suffering of ordinary Ghanaians.
Speaking on the sidelines of the launch of Eden Heights Apartments in Accra recently, he said government was taking steps to invest a percentage of the Pensions Fund into affordable housing for Ghanaian workers.
“When we talk about a credible mortgage regime, we’re saying one in which the average worker can use 30 percent of his income or her income to service a mortgage debt. If you do not spend 30 percent of your income and you go beyond it, then other departments of your life can suffer.
“Government is going to affect the Pension Fund. The legislation I want to push is that Tier One, Two and Three should be affected.
Mr Atta-Akyea further disclosed that government was pursuing legislation to leverage 30 per cent of the Pensions Fund for mortgage financing that would enable contributors to the Social Security and National Insurance Trust (SSNIT) to secure affordable housing.
The Minister explained that using the Pensions Fund for mortgage financing would reduce the interest rate on the houses to about nine per cent, which would be far better than the current commercial rate of about 30 percent.
It would also help reduce the current housing deficit of over 1.7 million and provide decent accommodation for the citizens.
Eden Heights is a luxury residential development located near the West Hills Mall.
Speaking to Accra-based Citi Fm, the minister said under the new mortgage regime, many people would be able to take up mortgage facilities with interest rate below 20 percent.
According to him, government was currently drafting a Legislative Instrument to allow it to use part of the Pensions Fund to support banks to sell affordable housing units to Ghanaians.
Commercial banks are currently charging between 25 and 35 percent interests on mortgage loans.
Analysts believe the current interest rates are high for ordinary Ghanaians.
By Jamila Akweley Okertchiri