HSBC unveils home loan linked to current a/c

HSBC has launched a new home loan product, whereby the credit balance in a customer's current account will be used to reduce the level of home loan outstanding and the interest payable on the loan.

The product, 'Smart Home', combines customers' current account with their mortgage repayment account.

For example, if a customer, having a home loan ledger balance of Rs five lakh, has a current account balance of Rs 10,000 in a given month, he will need to pay interest on Rs 4.9 lakh and not on the ledger balance, explained a senior HSBC official.

"Channeling surplus funds into the 'Smart Home' account not only helps a customer reduce the amount he owes the bank but also the interest cost. Besides customers can access funds anytime when needed," Ketan Jain, product manager - retail assets, HSBC, said.

The eligibility for the 'Smart Home' loan is a net income of Rs 1.5 lakh per annum.

The minimum and maximum amount of loan is Rs 5 lakh and Rs two crore respectively, with a maximum tenor of 20 years, and the interest rate is floating, which now is pegged at 7.50 per cent.

Meanwhile, HSBC's home loan portfolio has been registering 100 per cent annual growth and its disbursals are around Rs 150 crore a month.

"The outstanding is now in the region of Rs 2,500-3,000 crore," senior vice-president and head of retail loans Aalok Kulkarni said.