Will allow increase in loan amount, extension of repayment period
Bureau | MUMBAI, AUG 26, 2015 | Hindu Business Line
ICICI Bank, India’s largest private sector bank, has launched the country’s first Mortgage Guarantee-backed home loans for first-time borrowers in the affordable housing segment.
‘ICICI Bank Extraa Home Loans’ will allow a borrower to increase the loan amount by up to 20 per cent of the original amount, and also gives the option to extend the repayment period up to 67 years of age.
This increase in loan amount and tenure will come at a premium — an upfront fee of 1-2 per cent of the entire loan amount, including the incremental component.
“The fee will depend on the age of the borrower, extension in tenure, the nature of income — whether salaried or self-employed — and the loan-to-value ratio,” said Rajiv Sabharwal, Executive Director, ICICI Bank.
The facility will be suitable to largely middle-aged, salaried and self-employed individuals with seasonal income, seeking home loans of a maximum amount of ₹75 lakh.
Such loans will be available in four cities, Greater Mumbai, the National Capital Region, Bengaluru and Surat.
ICICI Bank has launched this initiative in association with India Mortgage Guarantee Corporation (IMGC), which will guarantee the incremental risk on default, Sabharwal said, adding that such products are popular in the US and Canada.
IMGC is a joint venture between National Housing Bank, an RBI subsidiary that regulates housing finance companies in India, NYSE-listed Genworth Financial, International Finance Corporation and Asian Development Bank.
Chanda Kochhar, MD and CEO of ICICI Bank, said, “We foresee that a young population and rapid urbanisation will lead to the emergence of enormous demand for affordable housing in Tier II and Tier III cities. This initiative will catalyse the growth of the Indian mortgage market by giving consumers improved affordability without incremental risks for lenders.”
The bank’s average ticket size of home loans is about ₹35-37 lakh with an average tenure of 12-13 years.
ICICI Bank’s housing loan portfolio is growing at 25-27 per cent and constitutes about 55 per cent of the total retail book.
Source : http://goo.gl/lKjTHp