The central bank in Saudi Arabia is assessing options how banks in the kingdom could reschedule housing mortgage after spending cuts by Riyadh slashed income of some borrowers in the kingdom, according to local media reports.

The Saudi Arabian Monetary Agency (Sama) as the central bank is known, won’t allow banks to change interest rates as a percentage of their incomes on the existing mortgages and the duration could run more than the usual lifespan allowed for such a loan deal, local Al-Riyadh newspaper cited unnamed sources as saying.

The report comes just days after Sama asked commercial lenders to reschedule the consumer loans in the kingdom. Financial institutions were barred from adding extra fees or change interest rates and they were asked to obtain customers’ approval for rescheduling the loan deals, according to a Sama statement published on its website.

With the rescheduling of consumer loans, the central bank said, it intend to ease the financial difficulties faced by the borrowers, whose incomes had been reduced, however if it asks the lenders to rescheduling the mortgages, they will have to absorb a significant part of costs in the rescheduling process.

The central bank expects the rescheduling of mortgages to take longer than the process for consumer loans. Outstanding real estate loans extended by banks to retail customers totalled SR108.2bn ($28.9bn) at the end of August. Consumer loans, a different category of lending, were worth about three times that sum, according to central bank data cited in the news reports.

Saudi Arabia, Opec’s biggest oil producer and top crude exporter in the world, last week cut salaries of ministers by 20 per cent and slashed financial allowances for public sector workers as another measure to compensate for falling oil revenues. Oil sales account for more than 80 per cent of the kingdom’s revenues. However, prices of crude have fallen more than 50 per cent from their mid 2014 peak of $115 a barrel and Riyadh has been running an austerity campaign to reduce an estimated $87bn budget shortfall this year.

The spending cuts could affect an estimated two-thirds of working Saudis who are employed by the public sector; many obtain as much as 30 per cent of their income from such allowances.