State Bank of India announced the launch of ‘SBI Reverse Mortgage Loan’, a product that will allow senior citizens to avail themselves of funds by mortgaging their residential property.
The product will be offered by all branches of SBI from October 12, the bank said here in a statement.
Senior citizens above the age of 60 years, who own and occupy a house, can avail themselves of loans, released in monthly or quarterly instalments or as a lump sum payment at the beginning, against the security of the house.
The loan will be given jointly if the spouse is alive, provided he/she is above 58 years of age, the bank said.
During their lifetime, the borrower does not have to pay the loan and will continue to stay in their house. Thereafter, either the legal heirs can repay the loan and redeem the property or the bank will sell the property and liquidate the loan. Surplus, if any, will be passed on to the legal heirs.
The loan carries a fixed interest rate of 10.75 per cent annually subject to reset at the end of every five years along with revaluation of security and re-adjustment of loan instalments, if necessary. For a loan of Rs. 1 lakh, the monthly payment to the borrower on a ten-year loan is Rs. 468 and on a 15-year loan it would be Rs. 225.
Similarly, for a loan of Rs. 1 lakh, the quarterly payment to the borrower on a 10-year loan is Rs. 1,423 and on a 15-year loan it would be Rs. 687, the bank said.
Eligible:
Senior citizens who own and occupy a house are eligible.
Loan Interest details:
Loan carries a fixed interest rate of 10.75 p.c.
For Rs. 1 lakh loan, monthly payment will be Rs. 468
Source: http://www.allindiabanks.com/?p=246
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