COMPETITION for borrowers between Thailand's financial institutions and commercial banks has increased significantly since the Bank of International Settlements reduced the risk rate of mortgage lendings from 100 to 50 per cent. The change has enabled financial institutions to double their lending capacity and prompted them to aggressively seek ways to lend their money. The most popular method is bringing interest rates down to a level with banks. The other is through extended repayment terms of up to 20 years, 30 years and, in some cases, even 99 years. A spokesman at Thana One Finance and Securities said borrowers generally considered interest rates and repayment periods before making a decision. However, a spokesman for the Siam Commercial Bank said one of the advantages of borrowing from commercial banks was that clients could repay their loans fully before the maturity date without any penalty charges. The bank recently introduced new rates of 10.75 per cent for loans with a repayment period of up to three years and 11 per cent for a five-year loan. A typical financial institution will charge from 11 per cent to 11.77 per cent for a loan, but with a longer repayment period. The rate cutting has filtered down to the low-end borrowers as well. The Government Housing Bank said it was also cutting its charges slightly. The bank now offers a fixed rate of 8.5 per cent for a loan lower than 100,000 baht (HK$25,000), 9.0 per cent for loans up to 200,000 baht and 10.25 for loans higher than 750,000 baht - the best terms in the country.