The repayments and interest that will be paid by members of the Government Institutions Pension Fund (GIPF) on home loans will go back to members’ pots.
The GIPF has announced that its pension-backed home loan scheme (PBHLS) will commence today.
The scheme offers qualifying members access to housing loans using a portion of their pension savings as collateral.
The maximum access level of 33.33% of a member’s pension credit was determined based on actuarial recommendations.
Under the scheme, members can transfer existing home loans from commercial banks or other financial institutions to the pension-backed facility.
Loans under the scheme will carry a variable interest rate linked to the Bank of Namibia’s repo rate.
The GIPF says the current applicable rate is the repo rate of 6.5% plus 2.5%, resulting in an effective interest rate of 9%.
GIPF spokesperson Edwin Tjiramba says the scheme is currently limited to active members employed by the government, as well as members on disability.
“The scheme will enable active members to access a portion of their pension savings as collateral for the purchase of an erf, to make improvements to an existing home, to purchase a new home, or for the construction of a new home in both urban and rural areas,” he says.
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