Axis Bank rolls out launches new home loan scheme

MUMBAI: Private sector lender Axis Bank on Tuesday rolled out a new home loan scheme - Empower Home Loan - aimed at self-employed individuals.

Both professionals and non-professionals will be eligible for home loans under the scheme.

The bank is promoting its assured rate reduction feature as the scheme's key selling point. Borrowers with a good repayment track record are promised three rate reductions of 25 basis points each at the end of second, third and fifth years.

"Self-employed people are the backbone of the India growth story . However, credit availability to this group tends to be limited. With 'Empower home loans', Axis Bank would like to partner in the progress of this group of customers and reward them for good credit behavioru," said J airam Sridharan, head, consumer lending and payments, Axis Bank, in an official release.

The maximum loan amount available under the scheme is Rs 1 crore for Tier I cities and Rs 50 lakh for other cities and towns. The maximum tenure under the loan is 15 years or till the borrower turns 65, whichever is earlier. Only the floating rate option is offered to borrowers under the scheme.

Upside: The scheme's USP - rates will go down by 25 basis points in the second, third and fifth years of the home loan tenure.

Downside: Assured rate reduction does not mean you should avoid scouting for cheaper loan refinancing deals later. If other lenders are offering rates lower than your reduced rate then, it might still make sense to switch over. Also, the maximum loan amount for Tier I cities is Rs 1 crore, which might not be adequate in cities like Mumbai.