Axis Bank's new home loan offering can help bring down interest cost: Here's how

Axis Bank has launched a new type of home loan that will bring down the interest cost for borrowers. Essentially, as against the industry norm, QuikPay Home Loan will offer an alternative repayment structure, where the customer repays an equal amount of principal every month along with interest on the outstanding balance.

How it works
Here, an equated principal amount combined with reducing interest amount component will lead to a decrease in monthly instalments (EMIs). As a result, there will be an overall reduction in total interest amount component paid over the entire tenure of the home loan, thereby benefitting the customer.


According to a press release issued by the bank, instead of EMIs, the borrower will pay reducing monthly instalments. While the initial instalments will be higher (than the EMI on the same loan amount for the same tenure), the instalment amount keeps reducing throughout the loan tenure.

The math
Say, you took a home loan of Rs 50 lakh for a 20 years at 9 percent per annum. This loan will have a total interest outgo of Rs 57.96 lakh over 20 years for the borrower. Now, if you took the same Rs 50 lakh loan under the QuickPay Home Loan, for the same tenure, even with a slightly higher annual rate of interest of 9.2 percent, the overall interest outgo will be Rs 46.19 lakh. This is an overall saving of Rs 11.77 lakh.

Repayment schedule for regular home loan

Repayment schedule for QuickPay home loan

Home loan details
You can avail a minimum loan amount of Rs 3 lakh and a maximum of Rs 5 crore. The rate of interest for salaried individuals is between 9.05 percent and 9.25 percent, depending on the amount borrowed. Compared to this, for a regular Axis Bank home loan the interest rate is 8.85-9.05 percent.