National Housing Board (NHB) has come up with its reverse mortgage loan (RML) scheme for senior citizens which assures the customers with lifetime payments without the earlier ceiling of 20 years. It expects more borrowers to come up with this product.
After just four and half months of the launch of the product, NHB has been able to get 40 loan sanctions so far which has been estimated to total to Rs. 100 crore.
"Annuity link provides comfort to participants. The original RML format has seen fairly good response. However, senior citizens were apprehensive about the scheme because of the cap on 20 years on payments. We should see a much bigger offtake in the coming days," said RV Verma, executive director, NHB.
The RML scheme was launched by NHB in 2007. According to this scheme the senior citizens who mortgage their house to the lender receive periodic payments from the lender. There is no need on the part of the borrower to repay the principal and interest to the lender during their lifetime.
Around 23 banks provide this RML scheme which includes State Bank of India, Punjab National Bank, Bank of India and Indian Bank.
The original scheme had a payment ceiling upto 20 years only. To counter this, NHB has come with this revised scheme which assures lifetime payments to the borrower and not restricted to just 20 years.