Low-cost home loans for public university teachers, SoE staffers

Public university teachers and employees of state-owned enterprises (SoE) are set to get loans at a 5 percent interest rate to buy houses or apartments, like the other government employees.

The government has taken a decision in principle and a separate policy is being prepared, said the finance ministry in a letter to the education ministry.

On July 1, the government announced a new home loan scheme for public sector employees, under which low-interest loans would be given out for buying houses or apartments. The repayment would be spread out over a 20-year period.

Any government employee under the age of 56 can get the low-interest housing loan, as per a notice from the finance division on July 31. Five state-owned banks and financial institutions signed an agreement on September 25 with the finance division about the scheme, which will have about 14 lakh beneficiaries.

The loans will start from Tk 20 lakh and go up to Tk 75 lakh depending on the location and grade of the government employee. The rate of interest would be 10 percent.

Of the interest rate, the government will subsidise 5 percentage points and the employee will bear the rest. The rate of interest will be charged only on the principal amount.

Loans can be taken for building houses and purchasing readymade flats.

For loans taken to buy apartments, the debt-to-equity ratio will be 90:10. The payment of instalments will begin after one year for building houses and six months for readymade apartments.