New policies to fix variable rate issue for Saudi borrowers: report

New rules enacted by the Saudi banking regulator will help fix interest rates on variable-rate housing loans obtained by Saudi nationals, industry spokesman Talaat Hafez told Sabq newspaper.

A large number of mortgage borrowers in Saudi Arabia were negatively impacted by the successive increases in Saudi Arabian Interbank Offered Rate (SAIBOR) since mid-2015, thereby hiking their monthly installments.

The industry spokesman said loan beneficiaries can now convert their contractual agreements with banks from Ijara to Murabaha to ensure fixed rates, adding that other solutions are underway at banks to solve the issue.

The Saudi Consumer Protection Association said eight banks amended their loan agreements with customers to eliminate confusion, namely NCB, Al Rajhi, Riyad Bank, Banque Saudi Fransi, ANB, Aljazira, Alinma and Albilad.