Record number of social mortgage loans in 2014

Last year, more than 7,000 Belgians received a social mortgage loan from the Flemish Social Housing Fund, a record high, reports VRT news. In total, the home buyers borrowed a total of more than €1.2 billion in social mortgage loans.

A social mortgage loan is intended for those with little savings who are therefore unable to qualify for an affordable loan from a conventional bank in order to buy a home. "People are finding their way to social lending, mainly because the banks are less  likely to give out loans to people who cannot afford a down payment," Tine Hendrickx of the Flemish Housing Fund told VRT news.

According to Hendrickx, it is not uncommon for banks to demand a down payment of as much as €50,000 for a mortgage loan. "And that’s an amount that a lot of people just don’t have," she said.

The advantage of a social mortgage loan is that lenders can borrow 100% for the purchase of a home, at a lower interest rate than that offered by most banks.