Regulatory Alerts2020-12-04 | Monetary Law Act Order No. 3 of 2020Maximum Interest Rates on Mortgage-Backed Housing Loans
The Monetary Board of the Central Bank of Sri Lanka has issued Order No. 03 of 2020 to cap maximum interest rates on mortgage-backed housing loans for salaried employees across public and private sectors. Licensed banks must apply a fixed rate of at least seven percent per annum for the initial five years, transitioning to a floating rate linked to the Average Weighted Prime Lending Rate plus a maximum one percent margin. The order mandates interest-free settlement at the end of the fixed tenure and takes effect on 10 December 2020 to stimulate domestic home ownership and construction.
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