Taiwan Today

A popular government-subsidized home loan program could be renewed for a second time, according to remarks made July 28 by Interior Minister Liao Liou-yi. The program makes it easier for the nation’s citizens to buy homes by offering them partial home loans at below market interest rates. The subsidized rates are set at 0.7 percentage points below the benchmark two-year postal-savings adjustable rate, which currently stands at 2.025 percent. This means that for a portion of their mortgages home buyers can apply for government-subsidized loans which would allow them to pay mortgage interest rates of 1.325 percent. Those buying homes in Taipei City, which has the highest cost of living in Taiwan, are entitled to up to NT$3.5 million (US$110,000) in government-subsidized loans, while those buying homes outside of Taipei can receive up to NT$3 million. During each of the previous two rounds of the home mortgage subsidy program, the government set aside a mortgage fund for potential buyers in the amount of NT$200 billion. The latest NT$200 billion will probably be used up some time in August or September, said Liao. This being the case, the Ministry of the Interior will soon submit a proposal to the Executive Yuan to ask that the program be renewed once more. Though the program has been popular with the public, it has not been an easy burden for the government to shoulder, and approval by the Executive Yuan is not guaranteed. Officials said that for every NT$200 billion the government subsidizes, it needs to allocate NT$1.3 billion per year for interest payments. Vice Premier Chiu Cheng-hsiung said the Executive Yuan does not have a predetermined stance on the issue. It will reach a decision only after it has held meetings on the matter, he said. Yeh Shih-wen, director-general of the Construction and Planning Agency under the MOI, acknowledged that whether the government thinks it can finance a third round of subsidized loans will be a crucial factor in determining whether the proposal is approved. But Yeh emphasized the positive contributions the subsidies have on the economy. For every NT$200 billion in mortgage subsidies, the government stimulates NT$650 billion in economic activity, by helping the housing market and encouraging home improvement projects, furniture purchases and so on, he said. (HZW)