Financial results show Islamic lenders are unaffected after shifting mortgages under floating rates to a fixed one

The landscape of pricing housing loans for retails has changed forever after the recent entrance of the Saudi Real Estate Refinance Company (SRC). These rules were almost impossible to abandon by local lenders if it were not for the full government support across all spectrums (goal is to increase homeownership to 60 percent by 2020 and 70 percent by 2030).

Background

Throughout May to June, more than eight Saudi banks embarked on a rare low-profile initiative, from global scale, to convert mortgages that are priced with floating rate to fixed one. Such initiative is only limited to the retail portfolio for mortgage lending. Early this year, mortgage holders, who lacks financial knowledge, found themselves exposed to Saudi interest rise (SAIBOR). After...