The National Housing Bank (NBH) has rolled out a special refinance scheme for banks and housing finance companies (HFCs) to encourage fixed rate home loans for the low-and moderate-income segments.
Banks and housing finance companies 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 per cent, according to Mr. R V Verma, Chairman and Managing Director of National Housing Bank.
Fixed rate home loans are aimed at justifying the interest rate risk that retail borrowers face, Mr. Verma added, on the sidelines of a conference where MoUs were signed between Credit Guarantee Fund Trust for Low Income Housing and six institutions, including Bank of Baroda and IDBI Bank.
Mr. Verma also observed that over 90 per cent of the home loans is on floating interest rate due to retail customers' preference.
"We need to create awareness about the refinance scheme among the lending institutions. Home loan borrowers in the low/moderate-income segments could be benefited if they get fixed rate loans", Mr. Verma said.