Saudi home loans fall even as borrowing costs ease
3-month SAIBOR averaged 4.74% in June 2026, well off its 2023 peak. New bank mortgages still fell 31% in the first half. What the rate is and what it means for borrowers.
The 3-month SAIBOR averaged 4.74% in June 2026, well below its 2023 peak, yet new bank mortgages to individuals fell 31.3% by value in the first half of the year.
Key figures
| Figure | Value | Period | Source |
|---|---|---|---|
| 3-month SAIBOR, monthly average | 4.74% | Jun 2026 | SAMA Monthly Bulletin, Tables 5 and 6 |
| 3-month SAIBOR peak | 6.3207% | Dec 2023 | SAMA Monthly Bulletin, Table 5 |
| SAMA repo rate | 4.25% | since 10 Dec 2025 | SAMA repo rate |
| New bank mortgages to individuals | SAR 32,148m, 48,714 contracts | H1 2026 | SAMA Monthly Bulletin, Table 12f |
| Same, a year earlier | SAR 46,761.6m, 61,849 contracts | H1 2025 | SAMA Monthly Bulletin, Table 12f |
| SAIBOR spread cap | 20 bp | fixed since 15 Dec 2022 | FTSE Russell methodology |
What SAIBOR is
SAIBOR is the rate at which eleven Saudi panel banks say they could borrow riyals from each other, unsecured. It is published every working day at noon by FTSE International, part of the London Stock Exchange Group, under rules set by SAMA (SAMA Rulebook). It sits above the central bank's policy rate and below what a household pays on a mortgage.
The daily fixing is sold through LSEG feeds. The free version is SAMA's monthly average, in its Monthly Statistical Bulletin.
Why it follows the Fed
The riyal is pegged at 3.75 to the dollar, so SAMA moves when the Fed moves. Its last cut, on 10 December 2025, took the repo rate to 4.25%, a day before the matching Fed decision took effect. SAIBOR sits on top of that with its own premium.
The chart shows yearly averages. The highest single month was December 2023.
The way down has been slower than the way up. SAMA cut repo by 175bp between July 2023 and December 2025, and by our estimate about 17bp of that easing never reached the interbank market.
A 20bp add-on that may disappear
Published SAIBOR includes a spread capped at 20 basis points, and that cap has applied for about four years. It comes from the formula rather than from what banks pay for funding. In December 2025 FTSE consulted on phasing it out over ten weeks (FTSE consultation). No decision has been published. If it goes ahead, the headline rate drops 20bp overnight.
What borrowers actually pay
SAMA publishes no mortgage rate. Contracts must name their reference rate and, if variable, show example instalments at higher and lower rates (Implementing Regulation, Art. 9). The margins banks add are not disclosed for home loans.
The nearest public evidence is REIT debt. AlAhli REIT Fund (1) pays SAIBOR plus 1.25% (H1 2025 statements), and SICO Saudi REIT Fund's Riyad Bank facility was repriced to plus 1.90% (H1 2024 statements).
For a household, a single point matters. On a SAR 1 million loan over 20 years, going from 5% to 6% adds about SAR 565 a month. Many first-time buyers are shielded anyway: under the Sakani programme the state pays the profit on up to SAR 500,000 of finance for households earning SAR 14,000 a month or less (MOMRAH).
Lower rates, fewer loans
Banks signed 21.2% fewer new home loans in the first half of 2026 than a year earlier. Over the same months the 3-month rate averaged about 4.81%, against 5.41% in the first half of 2025. Buyers are holding back, and the cost of credit does not explain it. Our mortgage market page looks at what is behind that.
Outlook
SAIBOR will keep tracking the Fed. The number to watch is lending: the yearly total has roughly halved since its 2021 peak of SAR 152.5bn.
Sources
- SAMA Rulebook, Saudi Arabian Benchmark (SAIBOR/SAIBID), circular 430418800000 of 13 December 2021: link
- FTSE Russell, SAIBOR and SAIBID Methodology: link
- FTSE Russell, consultation on SAIBOR methodology, 16 December 2025: link
- LSEG, SAIBOR rates page: link
- SAMA Monthly Statistical Bulletin, June 2026 (Tables 5, 6, 12f): link
- SAMA, Repo Rate decisions: link
- Federal Reserve Board, Open Market Operations: link
- SAMA, Implementing Regulation of the Real Estate Finance Law: link
- MOMRAH, Sakani housing finance support: link
- SICO Saudi REIT Fund, interim financial statements H1 2024: link
- AlAhli REIT Fund (1), interim financial statements H1 2025: link