Sakana Holistic Housing Solutions has reduced its base rate by 0.50 per cent (50 basis points) effective today (February 14, 2008), taking its new benchmark financing rate to 8.5 per cent per annum on a reducing balance basis.

This is part and parcel of Sakana’s commitment to ensuring the best value for its customers by offering mortgage financing at rates that are both competitive and reflective of the reduction in international and local benchmark rates.

The bold move also demonstrates that, despite ongoing global mortgage concerns, Sakana is confident that its financial position is robust and that the outlook for mortgage finance in Bahrain is stable.

“We weighed up the situation carefully, taking into account the sub-prime crisis issue and the resulting increase in credit spreads as well as the recent reduction in key policy rates by the US Federal Reserve and the Central Bank of Bahrain. On balance, we felt that it was important to show existing and potential customers that we are willing to share some of the positive impact on Sakana’s funding costs, despite the increase in borrowing costs due to widened credit spreads,” said CEO of Sakana R Lakshmanan.

The reduction will apply to new customers immediately. For existing customers financed on an Ijara basis, the reduction will be applicable from the start of their next applicable lease period.

For existing customers financed on a forward Ijara basis the reduction will apply immediately. For Murabaha customers, as the sale price is already fixed, there will be no change.

With this reduction, as an example, on a qualifying mortgage of BD20,000 ($7,560) over 30 years, the monthly repayment will be approximately BD147 per month based on the start rate. – TradeArabia News Service