Citibank unveils new Islamic home loan plan
KUALA LUMPUR: Citibank Bhd expects its latest Islamic home financing facility, Citibank Home Partner-i, to contribute 50% of its new mortgage business this year.
Citigroup Asia head of Islamic banking Rafe Haneef said Citibank Home Partner-i was a syariah-compliant home financing facility based on the concept of “musyarakah mutanaqisah” or diminishing “musyarakah”, which is a co-ownership agreement between the bank and the customer.
“Unlike most Islamic home loans, it is based on a floating base financing rate (BFR) with the added protection of a rate cap.
“This means customers can enjoy savings benefits when the BFR is low. In the event BFR rises, the customer is protected by the capped rate. If the BFR rises beyond the capped rate, the customers’ monthly payments will still be calculated based on the capped rate,” he told reporters at the product launch yesterday.
Rafe said Islamic home financing facilities were traditionally based on fixed rates, which consumers found inflexible especially due to the increasing cost of living.
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Pertinent Links:
1) Citibank unveils new Islamic home loan plan
Tuesday, March 06, 2007
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