Prime Minister Bruce Golding has reported that the National Housing Trust (NHT) has started to record profits since its decision to raise interest rates a year ago.

Speaking at a Gleaner Editors' Forum, last week, Mr Golding said the NHT recorded $600 million in profits at the end of the last fiscal year.

The news that the NHT has recorded $600 million in profits means that it has reversed a trend of losses that was threatening its viability.

The full report on the NHT's financial status is to be tabled in Parliament next month.

But Mr Golding said he was encouraged that the trust was now in a better position now than it had been last year.

"Our challenge now is really having done all of that, how to get get the prices of houses as low as is economically possible," Golding said.

In April 2008, the Government announced it was forced to increase the mortgage rates for top-end NHT borrowers to prevent the agency from going broke.

NHT's cash reserves

At that time, Prime Minister Golding said if immediate steps were not taken, the NHT's cash reserves would be totally depleted by 2010.

The prognosis was made after a study was undertaken in January 2008.

It showed that the average interest on loans fell from 7.8 per cent in 2003 to a projected 4.16 per cent for 2008.

At the same time, operating expenses had increased by 140 per cent over the same period.

Additionally, between 2003 and 2008, the NHT's total revenue had been cut by 18.5 per cent moving from a gross surplus of $3.5 billion in March 2004 to a projected deficit of $634 million in March 2008.

So, despite criticisms from the Opposition about increasing the mortgage rates, the prime minister was insistent that the move was necessary.

Only recently, the NHT also announced that it was lengthening the repayment period for its mortgages from 30 to 40 years.

It is also allowing borrowers to carry their debt up to the age of 70 instead of 65.

This means more people will now be able to access home loans and at lower monthly payments, but the longer they take to repay the loans, the more they will ultimately have to pay back in interest.

damion.mitchell@gleanerjm.com