Mortgage Rates in TCI Going Up?

With interest rates starting to rise in many countries around the world, vacation home buyers in the Turks and Caicos are asking where rates are going to go. Increases in interest rates will make home ownership more expensive and/or potentially decrease the amount of return on investment properties (unless they pass this increase on to their visitors of course). Needless to say, this could affect the real estate market here in TCI.

As with most of the America’s, mortgage rates in Turks and Caicos will go up. How much is still an open question, however we are preparing for this eventuality. At G&P Capital, we have dropped our 3 year term (unless a client is prepared to pay a premium on the rate). This precaution is to protect our fund from interest rate spikes which could leave us holding too many undervalued loans.

When Will We See Private Mortgage Rates Jump?

The timing of any rate increases is not known at this time, and we will try to make it gradual when they do inevitably happen. As a mortgage fund, we are not tied to any banking benchmark, but to attract and maintain our capital, we need to be in line with similar investments in the market.

As the local banks move their rates, we will follow suite. However, as a private mortgage fund, we feel we have the ability to adjust our loan portfolio mix or design loan features which can help alleviate the risks of rate volatility.

Will Rate Increases Affect the Market?

This is tough to predict, however I don’t think it will have a big effect. Most non-residents purchasing real estate in the TCI are cash buyers, who leverage property at home or take from savings. So unless the cost of carrying the mortgage on their other real estate becomes too high, I don’t believe this will move the needle in terms of sales or pricing here in Turks.

Overall, it is still a great time to buy real estate in the Turks and Caicos, and G&P Capital is your quick and easy source of mortgage funding!