Low-income Egyptians—who account for 75% of all subsidized mortgage recipients—are the most severely impacted by the government’s recent decision to raise interest rates on affordable housing loans, a senior official at the Mortgage Finance Fund told Al Manassa.
Speaking on condition of anonymity, the official warned that the hike—from 3% to 8% for low-income borrowers—would disproportionately burden the most vulnerable, who represent the majority of applicants under the “Housing for All Egyptians” program.
The Cabinet’s move, announced last week, increased subsidized mortgage rates for low- and middle-income applicants from 3% and 8% to 8% and 12%, respectively. The measure is part of a broader monetary tightening effort aimed at curbing inflation and addressing Egypt’s worsening fiscal crisis.
An estimated 600,000 people benefit annually from subsidized mortgage schemes, according to the official, although the figure fluctuates depending on housing availability.
The rate increase, however, applies only to new contracts. Existing agreements remain subject to the original, lower rates, the official explained to Al Manassa.
The fund is also re-evaluating previously rejected applications, potentially approving them under the old interest terms, particularly for applicants to the first three rounds of the presidential initiative, the source added.
On Wednesday, the government partially reversed the rate hike, reinstating the original 3% and 8% rates for those who applied under “Housing for All Egyptians” phases 1, 2, and 3. The decision was presented as an effort to preserve affordability for low- and middle-income groups.
The affordable housing initiative was first launched in 2021, when the Central Bank of Egypt introduced a 100 billion Egyptian pound program with a 3% declining interest rate over 30 years. That policy was part of a suite of social protections designed to insulate low-income Egyptians from economic instability.
But in 2022, following International Monetary Fund recommendations, Cairo shifted responsibility for subsidized loan programs—including mortgages—away from the central bank and onto government ministries, effectively ending direct monetary support.
In October, Housing Minister Sherif El-Sherbiny announced new income eligibility thresholds for the initiative. The Social Housing and Mortgage Support Fund sets the minimum monthly net income for low-income applicants is now 3,500 pound, with a ceiling of 12,000 pound per individual and 15,000 pound per family.
For middle-income applicants, the range extends from 12,000 pound to 20,000 pound per individual, and up to 25,000 pound per family.
In a statement, Mai Abdel Hamid, CEO of the Social Housing and Mortgage Financing Fund, said the revised thresholds were designed to broaden access to subsidized housing amid mounting economic pressures. It also ensures the program continues to deliver adequate housing for underserved communities.
