Fixed interest rate home loans have made a comeback in the market now. Lenders have once again started offering and aggressively advertising fixed interest rate. The next bank to roll out a fixed loan product is Axis Bank-country’ third largest private sector lender.
The bank has introduced a fixed home loan product for tenure of twenty years that is priced at 10.40%.
However, this ‘Lifetime Fixed’ interest home loan is available only for loans up to Rs 50 lakh for property up to Rs 65 lakh in metros and for borrowing up to Rs 40 lakh for property of Rs 50 lakh in other locations.
With this product Axis Bank wants to increase its focus on the affordable housing segment.
“This product comes on the back of Rs 5700 crore that we have raised after selling infrastructure bonds recently. With this we plan to increase the focus on infrastructure lending and on the affordable housing segment,” said Jairam Sridharan, President – Retail Lending & Payments, Axis Bank.
The home loan book size of the bank is one of the key contributors of the retail portfolio. At the end of the September quarter, the home loan book size stood at Rs 48,000 crore out of the Rs 90,277 crore of the total retail portfolio.
In present times, when the interest rate scenario is trending downward financial advisors caution against locking in to fixed term product. However, Sridharan says that interest rates can swing even upwards in the next twenty years and therefore a consumer would benefit from locking in to fixed rates.
Axis Bank also has another fixed home loan product which can be accessed for loan amount of more than Rs 50 lakh and is priced at 11.75%.
Recently, ICICI Bank also launched a fixed interest rate product for home loans for ten years priced at 10.20%.