Norms for home loans for up to Rs 10 lakh become easier

RBI eases process of taking home loans for upto Rs.10 lacs. On Thursday (05-March) RBI allowed banks to include Stamp Duty, Registration Fees and other Documentation charges to the cost of house / Home unit whose cost does not exceed or upward of Rs.10 Lakhs for the calculation of Loan to value ratio.

In Small Range Housing Loans, Banks approved upto 90% of the property value as a loan. For Example – to buy a house costing INR 10 lakh, a bank will give INR 9 lakh loan. Henceforth, the INR 9 lakh home loan will cover expenses incurred towards stamp duty, registration and other documentation charges. These expenses were excluded earlier.

In 2010-11, 48.73% of total home loans outstanding is constituted by below 10 lakhs loans. The relaxation in housing loan norms for the affordable housing will lesser the burden on those in the economically weaker sections (EWS)/ low income groups (LIGs) who want to buy/ construct a house.