ICICI launches first mortgage guarantee backed loans in India
(31 August 2015 – India) ICICI Bank has become the first bank in India to offer “Mortgage Guarantee” backed loans for retail customers looking to purchase their first homes in the affordable housing segment.
ICICI Bank Extraa Home Loans allows a borrower to enhance the loan amount by up to 20 percent and also provides the option to extend the repayment period up to 67 years of age.
The bank launched the initiative in association with India Mortgage Guarantee Corporation (IMGC).
IMGC is a joint venture between National Housing Bank (NHB), an RBI subsidiary which regulates Home Finance Companies in India; NYSE-listed Genworth Financial Inc., a Fortune 500 company; International Finance Corporation (IFC) and Asian Development Bank (ADB).
ICICI Bank managing director and chief executive Chanda Kochhar said at the launch the bank had pioneered and popularised many innovative solutions in the banking industry in India.
“The launch of the country’s first ‘Mortgage Guarantee’ backed home loan is yet another example.
“We foresee that a young population and rapid urbanisation will lead to the emergence of enormous demand for affordable housing in Tier II and Tier III cities.
“This initiative will catalyse the growth of the Indian mortgage market by giving consumers improved affordability without any incremental risks for lenders.”
She said the launch marks a milestone as our housing industry will now join its global peers in offering solutions to customers aspiring to buy their first home in the affordable segment.
ICICI Bank Extraa Home Loans has three variants, which have been designed to address the needs of a wide range of customers: For middle aged, salaried customers: This variant is suitable for salaried borrowers up to 48 years of age.
While in a regular home loan, the borrowers will get a repayment schedule till their age of retirement, with this facility they can extend their loan tenure till 65 years of age.
For young, salaried customers: The salaried borrowers up to 37 years of age are eligible to avail a 30 year home loan with repayment tenure till 67 years of age.
Self-employed customers: There are many self-employed customers who earn higher income in some months of the year, given the seasonality of the business they are in.
This variant will take the borrower's higher seasonal income into account while sanctioning the loans.
IMGC, the first ‘Mortgage Guarantee’ provider in the country, will cover ‘First Loss’ to ICICI Bank for such guaranteed loans.
The ICICI Bank Extraa Home Loans will adhere to the Loan-to-Value (LTV) norms as prescribed by the regulator.
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