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Teaser Home Loans - The Way Forward?
Teaser loans have interest rates are 1-2% lower than the prevailing market interest rates and low interest rates that are offered in a given period, say 1-2 years. When the honeymoon (the first year of what they are paying low interest rates), the borrower needs to move a variable interest rate in a given period.
In India, demand loans were introduced in January 2009. The initiative was presented by the State Bank of India (SBI) was quickly followed by other banks. In the current scenario, where interest rates are expected to increase in the near future, the home loan borrowers find the demand for loans attractive because it would have to pay low interest rates in the initial phase, but did not seem to the fact that, once the honeymoon period, when borrowers start paying variable rates, the displacement of the EMI will be enormous, causing changes in your financial planning. The same results in payment default increases affect asset quality and profitability of banks.
In recent months, the RBI has expressed discomfort with the banks that are willing to mortgage teaser rates. Considering the limit of the second quarter monetary policy for the delivery of goods in the case of housing loans teaser rose from 0.4% to 2%. This will limit the ability of banks to offer loans at interest rates lower in the early years. RBI is also concerned that borrowers do not rightly suggests how floating rates are calculated and what are the implications of call rates after the initial period of low interest rates. RBI also said that banks were ignoring the repayment capacity of borrowers, while offering mortgage loan rates. RBI has also expressed concern that normal home borrowers are not good for estimating the impact of higher loan rates home after a few years, and may default when rates on the rise again.
Total loan portfolio of State Bank of India origin is Rs 80,000 crore, the loan account for the teaser crore rupees 20,000 and about 3% believe that the default rate of teaser rates. For HDFC, the accounts of the loan portfolio for the teaser and 27% of its retail mortgage lending, ie 17,500 million rupees. Union Bank of India spent around. CR 3000. Teaser rupees in the home loan. Between March 2009 and December 2009, the mortgage loan portfolio of banks and other companies, housing finance increased by 9%. SBI was the first to start the system has increased its mortgage loan portfolio of about 25%.
Housing Development and Finance Corporation (HDFC) has extended the system four times in December 2009. HDFC Deepak Parekh Chairman said that lenders for loans teaser should remove the regime of RBI is quite unhappy with the product, because customers are unable to realize the consequences of teaser loan after the honeymoon. HDFC has expanded its home loan teaser in October, when the borrower must pay the first 8.5 years (April 2011) and 9.5 in the second year (April 2012). These rates were revised from the previous rate of 8.25% and 9% for the first year and second year respectively. The decision was taken with the fear of losing market share to rival banks. Now HDFC does not support the extension of this device, taking into account the provisions of additional assets mandated by the RBI.