India's largest public sector bank, State Bank of India, has announced that it will offer home loans with repayment period of 30 years, which is the longest home loan tenure offered by any bank so far in the country. Apart from this, the new scheme also decreases the equal monthly installments (EMIs) of the borrower, as against a normal 20 year home loan.
The 30 year home loan scheme has EMI amount of Rs. 889 for every lakh and carries an interest rate of 10.15 percent as compared to the EMI of Rs. 975 for same loan having tenure of 15 years.
On the matter, Mr. Giridhar Kini, the Deputy General Manager (Home Loans) of SBI, said that the product is targeted at young professionals who are in their mid twenties. He added that the product offers low EMIs which means that the borrowers monthly outgo on the loan is low.
Earlier this month, Bank of Maharashtra, too launched home loans product of 30 year tenure. Executive Director of the bank, Mr. C. V. R. Rajendran said that the scheme will decrease the borrowers EMI burden in the early years thus encouraging young professionals to opt for home loans early in their lives.
At present, the average age of borrowers of home loans is 35 years due to which banks do not provide home loans having tenure of more than 20 years.