NASSAU, BAHAMAS — Central Bank Governor John Rolle cautioned against over-interpreting the decline in recent mortgage applications, stating “we don’t want to read too much into it,” as residential mortgage applications fell by 12.4 percent in the first half of 2025 compared to the same period last year—though the drop was still less than the 25.5 percent decline recorded in 2024.
According to the Central Bank’s June 2025 Quarterly Bank Lending Conditions Survey, commercial banks received 695 residential mortgage applications, accounting for 99.4 percent of total requests. The data showed that applications for rehabilitations and additions fell sharply by 94.9 percent, while new construction loans declined 2.1 percent. In contrast, financing requests against existing dwellings surged by 60.5 percent, representing 76.7 percent of total mortgage demand.
Rolle said the figures should be interpreted in light of ongoing adjustments within the economy, particularly as the nature of employment continues to evolve. “Some of the issues that relate to mortgages also reflect the characteristics of mortgage applicants,” he explained. “It’s anecdotally observed that the job contracts being structured in many cases for new hires don’t have the same permanence or certainty as in the past. And so even to the extent that we are seeing the employment improvement, if those aren’t the equivalent of permanent and pensionable type employment, then it is harder for those types of hired persons to get the long-term mortgage arrangement.”
He added that commercial banks are now paying closer attention to the nature of job contracts when evaluating borrowers. “In many cases, banks are looking at whether the employment relationship comes across explicitly as permanent or just a fixed-term contract,” Rolle said. “Some of the conversations around housing and the mortgage market also have to do with how we transform more the nature of these new employment contracts and relationships.”
Despite the decline in applications, approval rates remained relatively stable at 53.9 percent, only 0.3 percentage points lower than in the same period last year. Renovation loans saw approval rates of 56.3 percent, new construction 69.9 percent, and existing dwellings 49.4 percent, while commercial mortgages recorded a notably high 75 percent approval rate, though they made up just 0.6 percent of total requests.
By island, mortgage activity was down 22.1 percent in Grand Bahama, 12.3 percent in New Providence, and 16.7 percent across the Family Islands. The report also found that 7.6 percent of mortgage applications were denied—mainly due to “miscellaneous” factors (45.3 percent of denials), high debt-service ratios over 50 percent (24.5 percent), delinquent prior loans and inability to verify income (each 9.4 percent), inadequate collateral (5.7 percent), no down payment (3.8 percent), and underemployment (1.9 percent).
Addressing questions on recent policy changes, Rolle pointed to the removal of the mortgage indemnity insurance requirement—a reform announced by the Central Bank in December 2023—as one measure intended to reduce barriers for qualified borrowers. “The mortgage indemnity, removal of the mortgage indemnity insurance requirement, would have had some positive impact,” Rolle said, “but one has to appreciate that a lot of these reforms—you’re going to see the accumulative impact over the medium and longer term. So one shouldn’t expect a year-to-year or over a 12-month period that you’re going to see, in every case, an uptick.”
He emphasized, however, that the policy change remains a net benefit for borrowers. “The bottom line is that it does mean that as banks are assessing individuals for mortgage affordability, they are able to say that if you’re not paying the indemnity insurance, that shifts a little bit more of your monthly resources towards making payments on the principal and interest for the mortgage. So that’s a plus.”
When the Central Bank announced the reform in December 2023, it said it was relaxing the minimum equity injection requirement for residential mortgages to ease access to credit. The policy removed the need for borrowers to obtain mortgage indemnity insurance to qualify for reduced down payments, setting the minimum equity contribution at 15 percent in the absence of such insurance.
The Bank noted at the time that while the change was not expected to have a significant short-term impact on personal lending volumes, it would “reduce the cost burden for suitably qualified borrowers and allow some additional individuals to qualify for credit.” Institutions were also permitted to vary or set lower down-payment requirements for mortgages within their internal risk frameworks, provided that borrowers’ total debt-service ratios remain within a prudent limit of 50 percent—with limited exceptions for debt restructuring or consolidation.
