Axis home loan cheaper for those not missing EMIs

Mumbai: Axis Bank has made mortgages cheaper for home loan borrowers, up to Rs 30 lakh, who make timely repayments. The bank has said that it will waive 12 instalments on a 20-year, Rs 30-lakh loan which will bring down total repayment down by Rs 3.09 lakh to Rs 58.71 lakh.
“We are rewarding good behaviour. There is an implicit benefit to both the borrower and the bank for timely payment.We believe this will also increase the longevity of the loan because of the benefits to the customer,” said Rajiv Anand, executive director, Axis Bank.
The Shubh Aarambh Home Loans launched on Thursday will enable borrowers applying for loans up to Rs 30 lakhs avail additional benefit of 12 EMIs waiver. The bank will waive four instalments at the end of the fourth, eighth and twelfth. These waivers will help shorten the repayment schedule.
The average ticket size of an Axis Bank home loan is Rs 28 lakh. The bank’s loans are distributed evenly among metros and non-metros. Loans under the new scheme can be used to purchase an under construction, completed or resale house or for self-construction or plot plus construction. Customers also have the option to transfer existing home loans to Axis Bank.
“We are not calling this an affordable housing scheme. Since the ceiling for the loan under the scheme is Rs 30 lakh, a large part of the eligible property will come under affordable housing,” said Anand.
Anand said that while a missed payment will disqualify the borrower from getting the benefit in future, the benefits accrued every four years will not be taken away in the case of subsequent defaults.
The bank already has a scheme for the affordable housing segment (of loans up to Rs 25 lakh) called ‘Asha’, which is aimed at the lower income group. As of June, home loans are 44% of the bank’s Rs 1.68 lakh crore retail portfolio.