What is LoanUP?
LoanUp is the first of a series of sustainable products that are being designed by the Foundation for Affordable Housing that will act as an enabler for housing affordability in Malta. It is intended for individuals and couples in gainful employment whose income restricts their access to the property market. LoanUp offers a new possibility for individuals and couples to progress in their personal goals. The Foundation for Affordable Housing and APS Bank plc are here to help you reach your goals. LoanUp is a financing product offered jointly by the two entities through which, if eligible, one can have access to a house loan at a discounted rate, enabling you to purchase quality housing that meets your needs.
Who is eligible for LoanUp
Eligible applicants can fall under one of two categories:
Category A: High Benefit Product Eligibility:
- Available to single individuals, younger than 25 years, with dependents and earning up to €25,000.
- Available to single individuals, aged between 25 and 30 years, with dependents and earning up to €28,000.
- Available to couples, with aged between 25 and 30 years, with dependents and having a joint income of up to €25,000.
For couples with dependents:
- Must earn up to €25,000 if both partners are up to 24 years old.
- Must earn up to €28,000 if both partners are between the ages of 25 to 30.
Medium Benefit Product Eligibility
- Available to single individuals or couples with dependents who earn up to €30,000, and aged less than 30 years.
- Available to couples aged between 25 and 30 years, without dependents and earning between €25,000 and €30,000.
- Available to single individuals, aged between 25 and 30 years, without dependents and earning up to €25,000.
The above eligibility criteria are subject to
- a combined existing net worth (comprising of cash, savings, other movable assets, and various investments) which does not exceed €45,000 for single applicants, or €75,000 for joint applicants and,
- a combined value of any existing immovable assets and property, whether residential or commercial, which does not exceed €50,000
How to apply for LoanUP?
Applying for LoanUp is simple. You can download the application form, fill-in the necessary details, attach the required documentation and send it on loanup@affordablehousing.mt. You will be contacted directly by the staff at the Foundation for Affordable Housing.
The LoanUp application form asks you to fill in basic details to determine your eligibility for a home loan at a discounted rate. Besides basic personal details, the application form will ask for your gross annual income, assets and properties held (if any). Depending on age, income, number of dependents, and marital status, qualifying applicants will benefit from a discounted rate as low as 1.95% through the application of the interest rate subsidy during the first 7 years at a fixed rate, and also as a variable rate per annum for the remaining term of the loan, based on today’s pricing. The overall APRC for this loan is that of 1.97% p.a. The combination of these benefits can boost your qualifying loan amount by up to 15%.
Representative example of LoanUp
What is the loan amount, monthly payments and property that can be purchased under LoanUp? This will vary by client, depending on age, income, and whether the borrower qualifies for LoanUp with High Benefit, or LoanUp with Mid Benefit.
For the purposes of this example, we will present the terms offered to a couple with dependents. The eldest of the couple is 30 years old. Having a joint gross income of €28,000 per annum, the couple is eligible for LoanUp with High benefit. This means that interest rate charged will be fixed at 1.95% for the first seven years of the loan. Following these initial seven years, the interest rate charged will be 0.30% below APS Bank plc base rate. Currently, APS Bank plc’s base rate is 2.25%. A 0.30% deduction means that the rate for the remainder of the term will also be 1.95%, assuming that the bank does not change its internal base rate until the full maturity of the loan.
Under these conditions, the following are the lending terms offered to an eligible borrower:
Loan amount: €227,421
Property value: €252,960
Upfront deposit required: €25,269 (10% of the property value)
Monthly repayment amount: €747.54
Total interest paid over lifetime of loan: €86,545
Assumptions made on the above example:
- Both clients are first-time buyers
- The consumer lending bank base rate (currently at 2.25%) remains unchanged during the period of the loan.
- The facility is utilised in full
- No loan prepayments are done throughout the term of the loan
- The loan maturity term of 35 years (420 total monthly repayments) is fully exhausted (i.e. the loan is not repaid before the last scheduled repayment)
- The credit agreement is to remain valid for the period agreed between the Bank and the consumer, and that both parties will fulfil their obligations under the term and by the dates specified in the credit agreement.