National Housing Bank, the umbrella body governing all housing finance companies has finally come up with directives which prevent lenders from charging penalty to customers for pre closure of housing loans, subject to conditions.
Prepayment of a home loan in case of a floating rate loan can be done through any source without attracting penalty by the customer. On the other hand a fixed rate home loan can be preclosed by the customer using only his own sources.
NHB has also asked housing finance companies (HFCs) to maintain equal stature in case of floating rate home loans given out to old as well as new customers.
"The directive to ensure uniformity in floating interest rate loans charged to old and new customers with the same risk profile is aimed at bringing efficiency in the home loan market. This will give borrowers the choice to move to a lender charging lower interest rate," Mr R.V. Verma, CMD of the bank said.