Home' Trinidad and Tobago Guardian : June 4th 2015 Contents JUNE 2015 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG7
Mortgage rates on new and existing homes
are likely to increase later this year, as a result
of Monday's announcement by the Central
Bank of an increase in the Mortgage Market
Reference Rate MMRR) by 25 basis points to
2.50 per cent.
In a statement on Monday, the Central Bank
said: "This up-tick was due to increases in
both the 15-year Central Government Treasury
yield and commercial banks' cost of funds.
Commercial banks and their affiliated non-
bank financial institutions are expected to
apply the MMRR--plus a margin--to all existin-
gand new residential mortgage loans that are
due to be re-priced from June 1, 2015.
"The margin will be negotiated between
the commercial bank and the customerand
takes into account the customer's credit rating,
the location of the property, the size of the
downpayment and the size and quality of col-
This week's increase in the MMRR to 2.50
per cent in June 2015 is the first hike in the
rate since its introduction in December 2011.
Contacted for comment, Scotiabank TT's
managing director, Anya Schnoor, said: "The
MMRR is a variable rate mechanism which
was introduced by the Central Bank in 2011.
"The MMRR is an index rate which is tied
to most retail mortgages. It is determined by
a combination of the average rate on deposits
in the banking system as well as the 15-year
government bond yield. When market con-
ditions change the MMRR may be adjusted,
as is the case this quarter. Mortgages tied to
this rate would be adjusted in line with the
agreed index mechanism."
As at December 2, 2013, the MMRR
methodology was adjusted to incorporate
the 15-year Central Government bond yield
rather than the 10-year Central Government
In an MMRR fact sheet, the Central Bank
stated: "The MMRR will make you aware of
changing conditions in the mortgage market.
This will enable you to better determine
when and why your mortgage rate is likely
"You should anticipate that your mortgage
rate can change when the MMRR changes. If
the MMRR declines, you should benefit from
lower mortgage rates once you have a variable
rate mortgage or an adjustable rate mortgage
that is due to be re-priced. You should
also note that if the MMRR rises, your
mortgage rate could rise but your bank has an
option not to increase this rate."
The next MMRR announcement is scheduled
for September 1, 2011
Permanent Secretary in the Ministry of Energy
and Energy Affairs, Selwwyn Lashley is promising
that dozens of contracted service providers working
at the Ministry will be paid by the end of the
Lashley confirmed that the workers who have
been retained by the Ministry to work on several
projects have not been paid for May because the
Ministry simply did not have the funds to do so
and that it is waiting for the Ministry of Finance
to release funds.
He told BG: "There has been an administrative
challenge between the Ministry (of Energy and
Energy Affairs) and the Ministry of Finance which
is being sorted out. We realised last week that we
had not received the funds to pay the workers for
their services and we wrote to the Ministry of
Finance seeking the funding. We have since sent
out an email to everyone indicating that they will
be paid within the next week."
Lashley pointed out that the workers are people
who have been hired by the Ministry on an as-
needed basis and that the Ministry pays them
based on the satisfactory provision of services.
"They are working for different units in the
Ministry. The way it works is if a unit requests
that they bring in a special skill to help on a project,
then a person is hired as a service provider for a
maximum contract of six months. We have tried
to pay them generally at the end of each month
but on this occasion we are awaiting money from
the Ministry of Finance."
Well-placed sources say those employed on
these service contracts do not have to be selected
through a transparent process but it is done in a
direct contract between the individual and the
In addition, BG has been informed that the
number of service providers at the Ministry of
These providers are not part of the Ministry's
contract staff which is another category of workers
who are used to fill positions that are not in the
public service and those positions have to be adver-
tised and are usually in a duration in excess of
one year but not exceeding a five year period.
There is also a graturity associated with the posi-
BG has also been informed that other suppliers
of services to the Ministry have not been paid; a
fact that Lashley did not deny in a telephone inter-
view on Monday. There are also reports in other
Ministries of short-term workers not being paid
because of financial challenges.
Mortgage rates may
trend higher soon
Late pay for Energy Ministry contractors
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