Axis Bank Woos Middle Class With New Fixed-Rate Home Loan Offer – Business Line – 10-Dec-2014
December 16, 2014 - Uncategorized
Axis Bank, India’s third largest private sector bank, has announced a limited period ‘Lifetime Fixed’ interest rate home loan scheme at 10.40 per cent for affordable housing.
“The offer is valid only till March 31, 2015 and is created specifically for the affordable housing customers with a loan size of up to ₹50 lakhs,” Axis Bank said. “This is for middle-class customers who have a monthly budget and need more stability in EMIs. With funds raised through long-term bonds, we saw this as an opportunity to offer fixed rates, which are close to the floating rates. This is a long-term product so the current downward interest rate cycle may not affect it,” said Jairam Sridharan, President, Retail Lending & Payments, Axis Bank. Recently, Axis Bank raised ₹5,705 crore through long-term bonds for funding infrastructure and affordable housing.
The maximum loan amount offered will be ₹50 lakh for properties situated in metros and ₹40 lakh for properties in other locations. The maximum property value in metros and non -metros is capped at ₹65 lakh and ₹50 lakh, respectively.
Under this product, Axis Bank will offer home loans to both salaried as well as self-employed individuals. For salaried customers, the fixed rate of 10.40 per cent is available on all Vanilla Home Loan offerings including Balance Transfer schemes. For self-employed customers the loan is available at interest rates starting from 10.65 per cent for similar variants.
Customers can also move from fixed rate to floating rate, or make a part payment/foreclose any time during the tenure of the loan by paying a switching fee or part payment/foreclosure fee respectively. Fixed rate loans for other than affordable housing properties will continue to be offered at 11.75 per cent for 20 years.
“Home loans have grown a bit lower than average in the first half of FY14. We expect home loan growth to be upwards of 20 per cent though the growth has been lower than the previous two years,” Sridharan said.
Home loans are a key component of Axis Bank’s retail lending, contributing 53 per cent to the overall lending.
Its retail portfolio stood at ₹90,277 crore as on Sept 30 2014, of which home loans were ₹48,000 crore.