The Government Housing Bank (GH Bank) of Thailand this week signed a contract with the Secondary Mortgage Corp. (SMC) for the securitization of 50 billion baht ($1.4 billion) worth of loans within five years, according to market reports
SMC will start issuing the first lot of GH Bank's securitized bonds worth 3 billion baht early next year. After that, it will issue securitized bonds worth around 10 billion baht each year.
GH Bank said it would also securitize another 10 billion baht of its loans through a consortium next year. If the first lot is successful, the bank will continue to do so in the following years.
The bank said it has recently seen new home loan applications more than double resulting from the upcoming expiration of personal income tax deductions.
The government this year extended taxable income deduction on mortgage principal payments of up to 300,000 baht. Usually, only interest payments of up to 100,000 baht per year can be deducted.
GH Bank released new home loans totaling 4 billion baht in just five days from Dec. 21 to Dec. 25, the same amount it normally releases in a month.
The bank said it expected new home loans extended in December this year to exceed 10 billion baht.