ICICI Bank on Wednesday launched the country’s first mortgage guarantee-backed home loan product ‘ICICI Bank Extraa Home Loans’ that will expand the credit amount and increase the tenure for an additional fee as well.
Available after paying a one-time mortgage guarantee fee to be paid at the start, ICICI Bank has launched this initiative in association with India Mortgage Guarantee Corporation (IMGC).
It will help customers raise the eligible amount by up to 20 per cent and increase the tenure by up to seven years, MD and CEO Chanda Kochhar told reporters.
Speaking at the launch, ICICI Bank CEO Chanda Kochhar said that this initiative will catalyse the growth of the Indian mortgage market by giving consumers improved affordability without any incremental risks for lenders.
Executive Director Rajiv Sabharwal said the fee will depend on the age of the borrower, extension in tenure, the nature of her income — whether she is salaried or self-employed — and the loan-to-value ratio.
It will be up to two per cent of the overall loan, including the incremental component, he said.
The product is targeted at middle-aged individuals and the self-employed, he added.
It can be recalled that over-leveraging of property by multiple loans is one of the reasons for the collapse of the American banking system in 2008, which led to the collapse of the global economy with the fall of Lehman Brothers and many other Wall Street titans.
(With inputs from PTI)