A bigger home loan is now on offer for the under 30s

APS Bank and The Foundation for Affordable housing are offering a scheme aimed at middle-income households which will allow them to borrow up to 15% more than the previously set limit.

Called the “LoanUp” scheme, lower interest rates will be paid by the scheme’s successful applicants.

The only criteria are that you have to be 30 years old or younger in order to make use of this scheme and earn an annual income under a certain bracket. The Foundation of Affordable Housing’s CEO Jake Azzopardi stated that they want the focus to be on areas where greater impact can be achieved. He also added that currently the market does not allow more people under the age of 30 to enter the property market easily, making it difficult for the age group to leave their parent’s homes. Another factor was the price of properties on the open market and that may people are studying for longer. For now, approximately €1m was allocated to the scheme and this funding will aid in financing at least up to €65m worth of loans.

But who exactly is eligible for the scheme?

Besides the required age of applicants being less than thirty years of age, under the ‘LoanUp’ scheme applicants have to earn €30,000 per annum or less. Applicants who are successful will also receive a larger loan sum due to the fact that they will pay a lower interest rate.

The CEO of APS Bank Marcel Cassar stated that at current rates his bank will offer interest rates that could be as low as 1.95% which a lot less than what is currently being offered to existing regular clients. As it stands, the base rate for residential loans are 2.25% and a lender will typically pay 3% interest on a home loan.

How the funds will be assigned

After being split up into two strands, the ‘LoanUp’ scheme will result in applicants qualifying for one or the other based on income, age or whether they had dependents or children. Priority will be given to applicants who have dependents.

If for example an applicant qualified for what is called the ‘high benefit’ stand, the applicant will become eligible for a loan with an interest rate that will be fixed for 7 years at 1.95%. After the 7 years, the interest rate will still remain 0.3% lower than the going rate but it will be variable.

Applicants who are eligible for what is called ‘Mid benefit’ will enjoy a fixed interest rate of 2.75%, also for 7 years, and the interest rate will always remain 0.3% lower than the going rate,  however it will also be variable.

Jake Azzopardi also mentioned that plans are afoot to assist those older than 30 as well, but he refrained from divulging any further details. The Foundation for Affordable Housing was established in 2022 by the church and the government and ‘LoanUp’ is their first initiative on offer. The Housing Minister also mentioned that those who apply for ‘LoanUp’ will still be able to benefit from any of the other initiatives on offer by the government.