India's largest bank, SBI (State Bank of India) increasing housing loan tenures by 10 more years. This is some good news for housing loan borrowers.
Normally, Banks keep the EMI (Equated Monthly Instalment) on housing loans intact and extend tenure to pass on the rate increase.
SBI has allowed stretching the loan repayment tenure to a maximum of 30 years as interest rates have risen by 2.5-3 % in the past 18 months.
Typically, a 0.25% hike in interest rates increase the EMI for a 20-year loan by Rs 17 for every Rs. 1 lakh borrowed. The loan tenure on average extends by 3 to 4 months if rates rise by 0.25%.
Typically, banks give home loans for a maximum period of 20 years and may extend the tenure for another five years on request. But with more than a dozen rate hikes in 18 months, the EMIs have shot up substantially.
SBI allowing extension up to the age of 70 years and also take into account the individuals pension income.
Other banks are expected to follow suit.
Normally, Banks keep the EMI (Equated Monthly Instalment) on housing loans intact and extend tenure to pass on the rate increase.
SBI has allowed stretching the loan repayment tenure to a maximum of 30 years as interest rates have risen by 2.5-3 % in the past 18 months.
Typically, a 0.25% hike in interest rates increase the EMI for a 20-year loan by Rs 17 for every Rs. 1 lakh borrowed. The loan tenure on average extends by 3 to 4 months if rates rise by 0.25%.
Typically, banks give home loans for a maximum period of 20 years and may extend the tenure for another five years on request. But with more than a dozen rate hikes in 18 months, the EMIs have shot up substantially.
SBI allowing extension up to the age of 70 years and also take into account the individuals pension income.
Other banks are expected to follow suit.
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