Developers, banks lose out on young home buyers

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avail of a home loan is very remote. In the second age group, it can be taken for granted that the home loan availer has managed to save the 10% component. However, the tenure of service, and therefore the loan repayment ability, is correspondingly lower.

Banks are not concerned with the age group, but its ability to pay the requisite 10% and service the loan thereafter. In other words, banks do not discourage younger borrowers from availing of home loans, it is the fact that these borrowers often do not have the 10% together that discourages them from availing of one. It is, of course, not realistic to amend the required contribution to a lower magnitude for younger borrowers, Renjhen adds.

Further, Renjhen said, "By the same coin, banks will lose out further on younger borrowers if the 10% component requirement is raised in the future."

Niranjan Hiranandani, managing director, Hiranandani Construction said, "We have certain customers in the age group of 25 years who have managed to pay up the remaining 10% requisite for home loans by borrowing from their parents and relatives. Hence, we have so far not faced with difficulties in terms of losing them out."