Now Lifetime fixed rate loan from Axis Bank.
Last month RBI had suggested Banks and Lenders to come up with some Fixed rate housing loan product and had asked the lenders to move away with the pre-payment penalties on the fixed rate loans. In response to that suggestion now Axis Bank have come up as the first and only lender to provide housing loans on fixed interest
rate basis for entire loan term. Earlier some of the other lenders like HDFC bank, ICICI Bank and LICHF were providing similar kind of loan but their scheme was mixed. Actually they were providing a combination of interest rates type that is the interest rate was fixed for some initial period of time and then floating interest rate was supposed to be followed.
According to the new Axis Bank Scheme of Fixed interest rates, they will be charge a fixed interest rate of 11.75 % p.a. Most importantly the point to be noted is the tenure of loan under fixed interest rate is 20 years. The bank said that they will provide 85 % loan for the property of value less than or equal to 20 Lakh and 80% on the properties valued more than 20 Lakh.
So we can conclude that for smaller sized loans this rate is 100 basis points higher than that of usual interest rate of 10.75% under the floating interest rate scheme. And for loans of larger value there is a difference of around 50 to 75 basis points. Please note that thought the floating interest rate problem has been solved under this approach of Axis Bank, but the pre-payment penalty still prevails. Axis Bank will be providing the fixed interest rate loans subject to the condition of 2 % penalty on outstanding loans.
Last month RBI had suggested Banks and Lenders to come up with some Fixed rate housing loan product and had asked the lenders to move away with the pre-payment penalties on the fixed rate loans. In response to that suggestion now Axis Bank have come up as the first and only lender to provide housing loans on fixed interest
rate basis for entire loan term. Earlier some of the other lenders like HDFC bank, ICICI Bank and LICHF were providing similar kind of loan but their scheme was mixed. Actually they were providing a combination of interest rates type that is the interest rate was fixed for some initial period of time and then floating interest rate was supposed to be followed.
According to the new Axis Bank Scheme of Fixed interest rates, they will be charge a fixed interest rate of 11.75 % p.a. Most importantly the point to be noted is the tenure of loan under fixed interest rate is 20 years. The bank said that they will provide 85 % loan for the property of value less than or equal to 20 Lakh and 80% on the properties valued more than 20 Lakh.
So we can conclude that for smaller sized loans this rate is 100 basis points higher than that of usual interest rate of 10.75% under the floating interest rate scheme. And for loans of larger value there is a difference of around 50 to 75 basis points. Please note that thought the floating interest rate problem has been solved under this approach of Axis Bank, but the pre-payment penalty still prevails. Axis Bank will be providing the fixed interest rate loans subject to the condition of 2 % penalty on outstanding loans.