India's one of the leading private bank Axis Bank has launched a new home loan scheme with a fixed rate of 11.75% interest for the entire loan tenure. The maximum tenure of the loan is 20 years.
Recently, ICICI Bank and HDFC launched dual interest rate home loans, where interest rate is fixed in the initial years of the loan, and after that the prevailing market rate becomes applicable.
Since March 2010, Indian banks have hiked lending rates by 3-3.5%. At present, banks are charging between 10-12 per cent on home loan below Rs 50 lakh.
India’s largest lender, SBI, is charging 11% for home loans up to Rs 30 lakh; 11.25% for loan between
Rs 30 lakh and Rs 75 lakh and 11.75% for home loan above Rs 75 lakh.
Mr. R. K Bammi, Executive Director-Retail Banking, Axis Bank, said, “Customers today are facing uncertainty about EMIs on their home loans due to interest rate increases in the market. At Axis Bank, we want to offer the customer certainty about the EMI they need to pay for the entire life of the loan.“
Under this 20 year fixed rate home loan scheme, a maximum of 85% of the value of property can be given as loan for loan up to Rs 20 lakh and 80% for loans above Rs 20 Lakh. There is a prepayment charge of 2% on the outstanding loan amount.
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