Axis Bank launches home loan product with EMI waivers for disciplined borrowers
Mumbai: In a bid to expand its customer base in the affordable housing segment, Axis Bank on Thursday launched a new product wherein disciplined borrowers will be eligible for waivers of 12 instalments on loans of up to Rs30 lakh.
Rajiv Anand, executive director at Axis Bank, said customers who take home loans of at least 20 years will be eligible for the waivers.
Based on the current base home loan interest rate of 8.35%, a borrower can potentially save over Rs3 lakh in waivers of principal and interest, he said. That apart, customers eligible for interest subsidy under the Pradhan Mantri Awas Yojana will have additional savings.
The waiver will work in the form of reduction in the number of equated monthly instalments (EMIs), he said.
The waiver on EMIs will be staggered to ensure customer stickiness and encourage timely repayments. Accordingly, four EMIs will be waived at the end of the fourth, eighth and 12th year.
According to Anand, the supply of home units within the Rs30 lakh bracket has increased given the government’s thrust on affordable housing.
“We would be very disappointed if this product is not in the vicinity of about Rs4,000 crore in about a year’s time,” he said.
Currently, Axis Bank’s affordable housing portfolio is around 5% of its retail mortgage book. As of 30 June, the share of home loans was around 44% in the retail portfolio of Rs1.75 trillion.
Anand said most of these loans are under its existing product, Asha Home Loan, which caters to serving the needs of low-income borrowers.