The Mortgage Indemnity Insurance operations involve insuring the upper portion of mortgage loans made by  financial institutions approved by the Jamaica Mortgage Bank to purchasers of residential dwellings, residential lots and agricultural properties. It protects the mortgage lender against loss in the event of default by the borrower.

Benefits

It encourages home ownership by enabling Approved Lenders to provide mortgages up to 95% of the purchase price and therefore enabling purchasers to make only a 5% deposit, plus their closing costs.

For Lenders

• The provision of Mortgage Indemnity Insurance allows the lender to grant a mortgage of up to 95% of the purchase price.
• Expansion of the lender’s mortgage portfolio.
• The risk of default on the loan is transferred from the lender to the Government of Jamaica.
• Institutions can hold more of their assets in mortgages, thereby satisfying the requirements of the Bank of Jamaica.

For Borrowers

• The prospective home purchaser will be required to provide a much smaller down payment, which may be kept to a minimum of 5% of the purchase price. 
• Improvement of the financing terms to low and middle-income families.
• The Mortgage Indemnity Insurance serves as additional security for the loan.

 

Qualification Criteria

• Loans bearing a maximum interest rate of 25% per annum
• Loans repayable over a period of 15-30 years
• Loans relating to a maximum selling price per dwelling unit of $15M
• Loans where the total monthly repayment by the borrower does not exceed 35% of his / her monthly salary

 

Premium

• A one-off payment of 7% of the amount insured is charged to the borrower