Dear Editor,
I seek your indulgence to respond to the September 27, 2025 letter by MP Sherod Duncan titled ‘The $30 Million Low-Income Mortgage Ceiling Confession’ following the recent announcement by the Government of Guyana to increase the low-income mortgage ceiling from $20M to $30M this year. Mr. Duncan contends that this adjustment reveals three “dangerous realities”: first that it is a confession of runaway inflation; second that it redefines ‘low Income’ out of existence; and third that the inclusion of insurance companies as lenders signals “lender fatigue” among current lending institutions. I contend that his interpretation is not only flawed, but that he fundamentally misunderstands how modern housing finance and affordability policy operates.
First, the policy to raise the ceiling reflects market alignment amid rising construction costs driven by supply chain shifts, labour demands, and energy prices. For clarity, the policy does not increase house prices, but rather increases access to preferential financing for homes already priced by the market. If the ceiling remained at $20m, people would still purchase homes between $25m to $30m but would be doing so using commercial loans at much higher interest rates. The ceiling increase therefore reduces the cost of borrowing. It is therefore incorrect and irresponsible to suggest that raising the ceiling is “authorizing the poor to borrow more because the government has failed”. Instead, it is an attempt to shield households from higher financing costs in a higher-cost environment.
Secondly, in economies across the world, low-income thresholds evolve with the growth of income and changes in household structures, and Guyana is no different. Our economy has expanded significantly over the last five years, resulting in a corresponding increase in income across sectors. A static $20m threshold would therefore artificially exclude thousands of Guyanese who are still structurally within the low and lower-middle income brackets. I hasten to add that though the ceiling has been raised to $30m, a tiered affordability model guides the PPP/C Government’s housing policy. The Ministry of Housing’s homeownership programme is designed to accommodate various income groups through graduated interventions, from subsidized low-income homes to affordable financing schemes for moderate earners, and public-private partnerships for middle-income buyers, including young professionals.
The “low-income” earners who Mr. Duncan references continue to benefit from lands subsidized by as much as $4.8m (US$23,500), and still has access to low-income homes constructed at varying costs ranging from $5.5M to $9.5m. Further, low-income families will also benefit this year from home improvement subsidies through a $7.5B programme budgeted for. “Low-income” in housing policy is an affordability category, not a sociological label. Regarding Mr. Duncan’s question of which low-income earner takes home enough to pay a mortgage of $150,000 monthly, I wish to remind him that mortgage affordability is assessed by lending institutions through debt-to-income ratios. The ceiling being raised to $30m does not force a borrower to take $30m. It simply allows those who can afford a $30m loan to now qualify for lower interest rates and longer amortization periods.
Thirdly, there is no shift to insurance companies away from commercial banks and other lending institutions like the New Building Society. Instead, there is a widening of the pool of lenders by including insurance companies, in keeping with international practices. The diversification of housing finance channels allows for increased competition in the market which triggers improved interest rate offerings to the benefit of borrowers.
So, the expansion of the pool of lenders does not signal that commercial banks are reaching their risk limits as Mr. Duncan incorrectly states. In fact, a simple google search would reveal that commercial banks in Guyana have been recording phenomenal success – particularly in residential mortgages – over the past five years. Demerara Bank for instance, recorded a historic $8.4B net profit after tax, with zero non-performing loans for the financial year ending September 2025. This represented a 50.5% increase over the previous year and a 184.7% growth over the past five years. Similarly, GBTI and Citizens Bank both recorded significant increases in their net profits when compared to the corresponding period in 2024. These figures are incompatible with any narrative of lender fatigue.
Finally, infrastructure rollout across housing schemes and mortgage financing are separate but complementary activities. As the Government continues large scale investment in road and water networks, electricity expansion, and drainage, the process of accessing finance for homeownership cannot be frozen until schemes are completed. It may have been the policy of the APNU+AFC who only delivered 7,000 house lots in 5 years, but it certainly isn’t for the PPP/C Government. I wish Mr. Duncan well in his budget presentation next week and respectfully suggest that a little more time be devoted to understanding housing policies he so confidently critiques.