TAIPEI (TVBS News) — The Ministry of Finance (MOF, 財政部) on Monday (Oct. 7) emphasized its ongoing efforts to ensure compliance with regulations prohibiting banks from tying mortgage insurance purchases to loan approvals.
This announcement follows media reports that public banks have been requiring mortgage insurance for new "preferential housing loans for the youth" (青年安心成家貸款), raising concerns among the Ministry of Finance and the Central Bank of the Republic of China (央行).
After the Central Bank initiated an interest rate hike cycle, mortgage rates surpassed 2%. In response, the Ministry of Finance relaxed conditions for its "preferential housing loans for the youth" on Aug. 1 last year. The current floating rate, after subsidies, is a market-low 1.775%. The maximum loan amount is NT$10 million, and the repayment period is extended to 40 years.
Despite these favorable terms, reports indicate some banks have linked mortgage insurance purchases to loan approvals due to tightened lending capacities following the Central Bank's reserve rate increase. A Ministry of Finance official stressed the importance of banks understanding customer needs and adhering to customer knowledge procedures when co-marketing mortgage insurance products.
The Ministry of Finance official reiterated that the prohibition against making mortgage insurance purchases a condition for loan approval applies not only to youth loans but also to general mortgages. The ministry will continue to monitor the eight major public banks to ensure adherence to these regulations set by supervisory authorities.
