“We have sanctioned over Rs 1,000 crore loans to senior citizens under Griha Varishta, and over 75 per cent of that has already seen disbursal to 2,500 customers since its launch a little over two months back,” Siddhartha Mohanty, managing director and chief executive of LIC Housing Finance, told .
He added that the average ticket size is Rs 50 lakh, and the loan is priced at 6.9 per cent, which is one of the cheapest.
The Griha Varishta also has another feature: If the loan is taken for a house that is ready-to-move-in then the borrower gets six equated-montly instalments (EMIs) waived off. Another feature is that if the loan is taken for an under-construction house or flat, the pre-EMI interest is charged only for the first 48 months.
Mohanty said both these features are aimed at encouraging sale of unsold inventory in case of the first benefit and to encourage timely completion of the project in the case of the second benefit.
“The response has been good and in fact, it is much beyond our expectation,” he said.
LICHFL also expects a good festive sale on the back of stamp duty cut in many markets, falling interest rate and its festive offer to waive off processing fee for between October 1 and November 30.
Meanwhile, Mohanty also said the company has already raised around Rs 23,000 crore of the planned Rs 50,000 crore fund raising approved by the board so far. Of this, Rs 5,000 crore have been through the targeted long-term repo operations, collectively of which Rs 2,000 crore came from the National Housing Board (NHB), Rs 3,000 crore from banks.
Mohanty said this is one of the reason why it could bring down its loan pricing so cheap at 6.9 per cent. The company’s cost of fund averages at 5.2-5.8 per cent and giving it think spread of 190-220 basis points.