Once the interest only period is over, the home loan facility will be treated as a normal loan account where the EMIs include both principal and interest until the maturity of the loan.
Standard Chartered Bank, India has today launched its interest-only home loan facility for new and existing customers of the bank who wish to avail a home loan.
The interest only home loan is a facility provided for the purchase of completed residential properties where, for a limited period of the term of the loan, borrowers will pay only accrued interest on the outstanding principal – referred to as an “interest only period”. “. No principal will be deducted during this interest only period.
This product is available to new and existing Standard Chartered Bank account holders. Borrowers can also take advantage of the ability to transfer their existing home loans from another financier to Standard Chartered.
Borrowers can choose to pay only the interest amount via equivalent monthly installments (EMI) for an initial period of up to 1-3 years. Once this interest only period is over, the home loan facility will be treated as a normal loan account where the EMIs include both principal and interest until maturity of the loan. Borrowers will also have the option of starting their full installments sooner without penalty charges.
Individuals can avail the interest-only home loan facility for a loan amount ranging from Rs 35 lakhs to Rs 3.5 crore. The maximum duration set for the loan is 30 years for employees and 25 years for the self-employed.
The company says the interest-only home loan will help customers reduce their initial cash outflow by paying less for the initial term of the loan. This offer will also help borrowers buy bigger or better properties of their choice without feeling constrained by higher installment payments at the start of the loan.
Jinesh Shah, Head – Mortgages and Retail Loan against Property, Standard Chartered Bank, India, said: “The interest-only mortgage is part of this approach as it offers an alternative for people who want to take advantage of current terms and reduce their EMI for the initial term of their loan. The residential housing sector accelerated from a year ago.
It further adds, “Stamp duty reductions announced by state governments, unmet demand due to COVID-19 restrictions, and moderation in home loan interest rates have resulted in sales growth of commercial properties in the primary and secondary markets as well as home loans. »