National Housing Bank
(NHB) is planning to offer a special refinance scheme to mortgage lenders for
loans to low income groups in a move that is likely to create a long term
market for fixed rate home loans and boost affordable housing reports Mint.
Lenders, including
housing finance companies (HFCs), will use the funds from NHB to offer loans to
low-income borrowers at concessional fixed interest rates & insulate them
from the volatility of rates.
Mr.R. V. Verma, CMD, National Housing Bank
said, “The NHB board had recently approved this refinance scheme for providing
loans to low income households to buy affordable houses. It should be rolled
out from the next fiscal (2013-14)”
15 Year Loan..!
Under the refinance
scheme, borrowers with an annual income of up to Rs. 2 lakh can get a 15 year
loan from banks or HFCs at concessional fixed interest rates. This scheme will
facilitate purchases of houses costing about Rs. 10 lakh.
Mr.R.V.Verma also
said, “There will be a cap on the lending rate so that a long-term, fixed-rate
market for these people who can not absorb this volatility of floating rate is
created. Also, this long-term, fixed rate will be available to them at a
relatively lower rate as compared to the market.”
NHB will lend to
banks & mortgage lenders at 1.50% points less than its prime lending rate,
which will work out to about 8.5%. Now, banks are lending at 11.5 per cent.
Rs. 10 lakh to Rs. 15
lakh ..!
With a credit
guarantee cover from the ministry of housing, banks will be in a position to
lend at about 9.25%.
NHB expects that the
huge demand for low-income housing will prompt builders to offer houses in the
Rs. 10 lakh to Rs. 15 lakh range on the outskirts of cities and towns.
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