Starting Monday, mortgage holders at the Trinidad and Tobago Mortgage Finance Co Ltd (TTMF) will be paying lower interest rates.

The company, which is jointly owned by the National Insurance Board (51 per cent) and the Government (49 per cent), posted on its website that effective October 1, mortgage rates which ranged from six to eight per cent will now be from five to seven per cent.

The conditions for this mortgage rate reduction are that the account is current; the customer is not in receipt of Housing Development Corporation (HDC) or Tobago House of Assembly (THA) two per cent mortgage rate, and the customer does not have a Home Mortgage Bank or Inter-American Development Bank loan, the website noted.

The plans to lower the mortgage rate have been in the works since May last year, TTMF chief executive Ingrid Lashley told the Express in a telephone interview yesterday. The company had put forward to its line ministry, the Ministry of Finance, which was accepted and written into the last budget. The process took almost a year and half because the company needed to refinance its debt.

"After the inherent approval from the government in the budget, we progressed our liability management strategy to reduce our cost of debt. We have since been able to do that, along with an AA-CariCris rating—which rates us as high in terms of investment-worthiness. We've passed on savings in a reduction in the cost of debt to our customers via a reduction in their interest rate," Lashley said.

Lashley said she believed the impetus for the interest rate reduction came after an assessment of the liquidity in the system and the general reduction in interest rate as a result of that, and to allow those who were at the level of low and middle income to benefit.

"It may make us more competitive with regards to new business, but there is also the issue that we balance the saving with an additional volume of business," she added.

Also mentioned in the last budget was a proposal to merge the TTMF and the HMB. "That is a longer process and we are in stakeholder discussions now on that issue. That is a process that will take a longer time," she said.