The Home Mortgage Bank (HMB) is the only institution operating in the secondary mortgage market. HMB was established by an Act of Parliament to provide liquidity to the mortgage market by buying mortgages from primary lenders.
HMB gets most of its financing through the issue of bonds. HMB is a public/private partnership with its main shareholders being Colonial Life Insurance Co. (Trinidad) Limited (43.8 per cent), Republic Bank Limited (24 per cent), the Central Bank of Trinidad and Tobago (12.5 per cent), the National Insurance Board (7.5 per cent) and Scotiabank Trinidad and Tobago Limited (6 per cent).
The Home Mortgage Bank has entered the primary mortgage market in the face of the slowdown of the secondary market. In an effort to build its market share, HMB has introduced several new options. These include:
- For existing properties, a choice of a variable-interest rate of 8 per cent or a fixed-interest rate of 8.5 per cent, which
- becomes variable upon the expiration of the tenth year;
- Waiver of insurance premium;
- 95 per cent financing (compared with a maximum of 90 per cent for other lenders);
- No penalties for early repayment.