When we first talked about Steward Bank offering mortgage loans to Zimbabweans in the diaspora the overall sentiment was that this was welcome and that their terms were relatively great. However, some felt that the 9% per year interest rate was too much. Well, it looks like Steward Bank was listening.
Interest rate goes down
We in Zimbabwe thought that 9% was a super sweet deal perhaps because we have lived under high inflation and even hyper inflation for a long time, a very long time. Perhaps 9% sounded so great because it’s the lowest interest rate we have seen in Zimbabwe. Now Steward Bank Diaspora Banking has slashed interest rates for diasporans buying or building in Zimbabwe. The new rate: 2%. Yes, 2!
Diasporans now have to raise less deposit than before
When we first announced the deal, the borrower was required to raise 10% of the sum they wanted as their deposit (contribution towards buying or building the property). Now, the deposit has been halved to just 5%. This means if you are in the diaspora you don’t have to raise as much for you to qualify for a mortgage.
You don’t have to wait 3 months if you are a new account holder
Initially you needed to have been banking with Steward Bank from the diaspora for 3 months before they could entertain talk about borrowing to build. The deal has just been sweetened: you can apply for a loan immediately after opening the account.
You can apply up to double the previous limit
The first offer was that you could borrow up to a maximum of $200 000. Steward Bank has just doubled that maximum to $400 000. The deal keeps getting better right?
Repayment period has been extended
When we first brought this up the maximum tenure was 20 years depending on how close you are to the retirement age of 65. The maximum tenure has been increased to 25 years or retirement age of 65 whichever is sooner. This means that you can pace your installments much more comfortably.
You could soon be able to buy the property from Steward Bank themselves
Word reaching us is that Steward Bank wants to go into property development themselves. This means you can buy the property from them pretty soon.
This is undeniably a very good deal and one which competes with deals from anywhere in the world. An interest rate of 2% betters or at least equals any in the US and UK. I am no expert but I haven’t come across such low rates in SA.
You can visit the Steward Bank website or reach their diaspora banking unit on diasporamortgages@stewardbank.co.zw
For requirements you can check the first article we wrote:
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35 comments
2% makes great sense considering they will make more on forex premiums.
Makes sense why the deal is so sweet
They will make a fortune on forex rates
It doesn’t make sense at all. A person in the diaspora might as well save their money in their diasporan bank, getting good interest, then buy a house when they decide to move back.
Not sure where you are were interests rates are favourably. Where I am it’s around 2.5% at most.
as a diasporian the product doesnt make sense because houses in zimbabwe have a usd premium on them which would make it very expensive for the quality of house you would be getting. am keen to see if there are any people who are taling these loans
I don’t really agree. Yes there is a differential on value of money but fixed property is under deflation right now in real money terms because the market is not liquid at all.
Do a comparison of property prices over time since dollarisation and factor in currency differences after the bond note
Why work my butt out to build a mansion inogara makonzo when my life is in the Diaspora? Who for one thinks oneday they will settle forever in that S**t***l with sewages spilling all over and thugs killing people over night for what they worked for thwir whole life. Zimbabweans’ moral fibre has been thrown through the window and many other things are not working as expected. Maybe at 1%
Ipapo ndowirirana newe. Property, even rentals, cant fetch a lot. There is no value proposition in buying property in Zim when I’m in the diaspora. The houses are also extremely pricey. I’d rather buy flats in SA and rent them out.
Home will always be home
its a hood idea will read mote to see how it works
Don’t text while driving please…. life is very precious!
I suspect they will be making more than the 2% on the house here.
Hear me out.
They tie you down to a loan of $100,000 over 10 years, at 2% per annum is $102,000 (yeah, yeah, forgive me, I don’t know if it’s compounded or simple interest). However, they will pay out someone in Zimbabwe for their house $100,000 in RTGS/transfer/bond money which means that they are getting their USD at 1:1 with the USD, while the buyer of a house “loses” on the 55% premium that they could have got. If they could find US$67,000 in their country of residence and dispose of it at “local rates” (which is illegal, so tread cautiously here), then they have borrowed less money at about the same rate of 2% per annum.
Just my thoughts.
That’s assuming the buyer has a lump sum or they can borrow from a bank in their resident country
True, highly premised on that possibility.
Someone in the diaspora would be better placed to advise what opportunities are at their disposal, hence advising whether this is a good deal or not.
Techzim at it again!
You guys write shallow articles, what is the difference between this article and the stupid Steward Bank advert. You shld have done a comparison of the old deal to the new, using a simple armotisation table. Readers would benefit more by finding out how much less they have to pay based on the new deal, and how much savings they can make.
Hey give us the intelli#less of your writing not to abuse us when we are not intelli#less like you so we know. Also using word stupid for an item typed by another person without qualifying the stupidity makes you more intelli#less
My job is to read not to write, writing is TechZim’s job. I am giving them valid feedback, its up to them to take it or leave it. I do my job well (reading) and they have to make their articles worth my reading.
Apologies if this is not as simple as you would have wanted. I thought comparing the new interest rate to the old, the new tenure to the old, the new maximum you can borrow to the old, the new deposit to the old and the new waiting period to the old was a simple comparison.
Maybe the word armotisation makes things better?
And you said we are shallow, so I don’t know which it is: are we too shallow or are we not simplifying things enough?
I ask this very earnestly
Pakanaka mukoma Tinashe nechikwata.
The minium I expected was towards the end of the article, you put a section with a comparison that says for instance 200k over 15 years on old terms results in a repayment is $x per month (totalling x*15*12) – compared to the new terms 200k over 15 years repayment is $y per month (totalling y*15*12). Such a comparison will drive the point home as it speaks to the readers’ pocket (a saving of $x-$y every month) under the new terms.
Just to be clear, the comparison above is NOT an amortization table.
My apologies for appearing like I’m bashing you, I’m just saying as a regular reader, some of your articles are purely news (like they are written by a common journalist), lacking the analytical insight of a real blogger. But again, I guess Rome was not built in a day.
Totally get you. Another reader also suggested we give an example in the article.
Oh by the way, sometimes finding that balance between news and opinion is hard for us. In general though, Techzim writers should write what happened and then their thoughts about it. This then stimulates debate. Our objective is the ensuing debate and the sharing of multiple opinions.
We will keep getting better at doing so… Thanks
I think this is an excellent article. I had a reletive who was interested but was turned off coz of the 9% interest rate, 2% is way lower then the 4,4% he was charged in the UK. The issues of USD premiums are just temporary just like the hyperinflationary days especially if you go for 10 to 25 year loans. In the long run its a very sweet deal. Keep this up TechZim. Amazing article
Econet needs USD for infrastructure so this can be a clever way of financing this without paying interest actually make interest… They don’t need USD to bid here so like golix it’s all about leverage and arbitrage… The 3 tier system is making a lot dealers and not actual product… Very clever…I agree with buying a flat in SA this going to be a hard sell. @William when golix going to start trading again we need the premium
Wow 2% is this for real??
I need to open an account also stuward bank am in USA
The interest rate of 2% on mortgage loans is certainly inline with most of the rates in the so called developed countries particularly, USA, UK and Australia. To suggest it’s better to keep your cash in the bank in the diaspora and earn more interest is pure misinforming people and not realistic. Interest rates for savings are at their all time low worldwide right now and barely exceed 3% even for term deposits and most other incentive based savings accounts, otherwise they range between 0.9-1.5% for regular savings accounts. The other thing is very few Zimbabweans in the diaspora have huge cash savings worth talking about anyway, I mean balances exceeding $30 grand-$50grand be it US$, GB£, EU€, AU$, etc. So talking about earning interest from savings with balances less than this is just out of the question as the long term benefit is negligible considering the bank charges, taxes, etc. On the other hand mortgage loan interest rates are also similarly at all time lows too, in most countries ranging at minimums of 4.1% – 5.0%, so the Steward Bank’s revised offer of 2% is certainly with close range with those in leading economies.
For those who have been hoping to own a home/house to use whenever they visit relatives back in Zim, this offer by Steward Bank presents a very good opportunity for anyone with a regular income in the diaspora to buy that dream house, depending on your price bracket and area of interest. It’s certainly not all doom and gloom on the Zimbabwean property market. Yes there is widespread criminal activity, mainly due to record breaking unemployment levels of the 20-40yrs age group and other socio-economic factors. On the other hand, keeping your property secure is equally easy and affordable too if you put your mind to it without attracting the attention of those same criminals.
Therefore, in my view after having recently bought a house for cash due unavailability of such offers, for those determined to acquire at least a decent existing house in the very good low to medium density areas in Hre, Byo, Gweru, Mutare, Kwekwe, Masvingo, etc, without being too focused on investment returns, this offer presents an easier way of buying that house.
Average house prices in some areas of Zim are certainly affordable when you compare with many countries in terms of ‘price per square metre’ of the stands houses are built on and the sizes of those stands, without taking into consideration other factors like the suburb and quality of the houses, etc.
The house one buys does not necessarily have to be a huge mansion or some spectacular house like those of multi-million dollar earning celebrities. In fact some, if not most, prices of houses in Zim are actually the value of about 5%-10% for most houses in the developed countries I mentioned, with even smaller stands than those in Zim and this is a fact, and that is the range of the compulsory minimum value of deposit required for most mortgages by banks and other financiers in the diaspora. Just search for houses for sale in whatever country of your choice on Google, then on the real estate websites’ results, filter the houses for sale listings by land area sizes and compare to those of similar sizes in Zim to see for yourself what I mean. While on the same realestate websites, usually there are a lot of mortgage loan adverts, so one also can have a good look at these and compare with the Steward Bank’s offer.
I personally will be looking to buy another house to take advantage of this offer.
Thanks for sharing such good information.
Just for the record….Tiri maZimbawean zvachose, kugara nekushandira kudiaspora hazvireve kuti tave vekuno. Chiratidzo chekudaro kungo garo bvunziwa kuti “where are you from?”, pese pese newose waunenge watanga kuita nyaya naye nekuma basa.
Kuva zhinji vedu takabva kuZim tati kurei zvekudarika 30yrs, nyangwe tikabudirira sei kudiaspora, patino shanya kuZim. Unongonzwa kuti wasvika kwako chaiko, kwaunoita madiro uchigamuchirwa nemufaro usinga bvinziwi zvisina basa.
You have spoken well there. I find houses and stands in Zim more expensive than neighboring countries though like Zambia and SA. Zambia has started some housing projects which are amazing if you can check Roma Park on FB or Nkwashi. Wish we had those kinda projects in Zim too. Where I reside there is no interest in the money you keep in the bank unless you reach a huge amount 😂 but they do give loans with reasonable rates which won’t beat 2% though. I’m just not sure about banking in Zim guys, what if they wake up and say this bank is closed ? Or all the money on your account is now Zim dollars or anything crazy 😜?? Once you have applied let us know how it goes.
Does anyone know if the 2% is fixed for the whole term of the loan or only a few years?
I have submitted a formal enquiry with Steward Bank, so I’ll try and share whatever information they give me in response. In the meantime I have been looking at house prices in various areas on http://www.property.co.zw , and I must say you can buy an average very good house for way less than $150 grand around Harare and even for less in smaller towns in low and medium density suburbs.
So with this offer all you need is about $7.5grand upfront for the 5% deposit. Personally, I would suggest to pay the highest deposit you can to reduce the amount you have to pay interest on the resulting balance and your monthly repayments of the mortgage. This way if you need to have part or even all of the house rented out, that rent may well be enough to pay off that balance leaving you some holiday spending money when you visit.
My thoughts regarding interest rate changes are that it would vary in respect to global trends, if that is what they are trying to match because in other countries it is generally set by the reserve bank’s official rate recommendations as reviewed from time to time.
I would love to get a loan to buy a house in Zimbabwe
Would like to buy a house
I would like to get a house in Harare.
Thanks for the vision. Those who were used to steal money from their diaspora relatives asking them to build houses are grounded. They’re not happy and will try to find any silly reason to play down the economic sense in this fantastic deal for those in the diaspora.
Has anyone really started on this programme. Are the programme organizers professionnal? Do they reply to your questions whether on email or whatsapp? I have tried all the venues. No one is interested. How do l join this programme?