In its attempt to encourage fixed rate home loans for the low and moderate income segments, the National Housing Bank (NHB) has recently rolled out a special refinance scheme for banks and housing finance companies (HFCs). The financial institutions, which are giving fixed rate home loans up to Rs 10 lakh can get refinance for 15 years from NHB at a concessional interest of 8.60-8.75%, said Chairman and Managing Director R.V. Verma, explaining that fixed rate home loans are aimed at mitigating the interest rate risk that retail borrowers face, he said adding that wherever MoUs were signed between Credit Guarantee Fund Trust for Low Income Housing and six institutions, including Bank of Baroda and IDBI Bank and that over 90% of the home loans is on floating interest rates due to retail customers' preference. In fact, the bank is keen to create awareness about the refinance scheme among the lending institutions as home loan borrowers in the low/moderate-income segments could be benefited if they get fixed rate loans. In a related development the NHB will float tax-free bonds to raise Rs 5,000cr of which Rs 3,750cr has been earmarked for retail investors while Rs 1,250cr will be raised through private placement to institutional investors.
India News | For International News click here