State Bank of India (SBI) on Monday introduced SBI FlexiPay Home Loan, whose repayment terms — lower EMIs in initial years, followed by higher EMIs — appear similar to teaser loans introduced by the bank in February 2009.
The bank said in a statement that the new offering will enable young working professionals to get higher loan amount compared to their loan eligibility under normal home loan schemes.
Rajnish Kumar, managing director, SBI, said in doing so the bank will not dilute the prescribed loan-to-value (LTV) ratio. “This product cannot be called teaser loan as we have taken adequate safeguards like making it available only for salaried professionals and not for all categories of customers.”
Kumar said that the main difference between FlexiPay home loan and teaser is that the interest rate in this scheme does not change as it did in a teaser loan.