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Saudi banks and financial institutions lower monthly deduction rate to 55% for employees earning below SAR 15,000
Banks and financial institutions operating in Saudi Arabia reduced the monthly deduction rate for new personal and mortgage loans. The new rate became 55% of the total monthly salary, compared to the previous 65% that had been in place since 2014, Al-Eqtisadiah newspaper reported, citing its sources.
The new deduction cap will apply to employees earning below SAR 15,000, regardless of whether the loan is subsidized or not.
This move seeks to enhance the quality of life for middle- and low-income segments by better balancing the needs of home financing and household financial sustainability, the sources added.
According to data available on Argaam, the monthly debt obligations for customers with a total monthly income of SAR 15,000 or less are subject to some restrictions:
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Debt Rules Set for Customers with Salaries of SAR 15,000 or Less |
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Item |
Restriction |
Percentage of Total Income |
|
A |
Maximum monthly credit obligations arising from the financing and related only to the monthly deduction from the customers’ total salary |
33.33 % |
|
Maximum monthly credit obligations arising from the financing and related only to the monthly deduction from the total salary of retired customers |
25 % |
|
|
B |
Monthly credit obligations, other than mortgage financing, from the total income |
45 % |
|
C |
Monthly credit obligations arising from financing in general |
55 % |
|
Monthly credit obligations of the beneficiaries from the Ministry of Municipalities and Housing or REDF (mortgage financing products) |
65 % |
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