Purpose of Loan
- For construction of a house or flat
- For purchase of a built house or flat
- For purchase of an under-construction house or flat from Housing Boards, Development Authorities, Co-operative Societies, or Private Builders
- For carrying out additions to the house or flat
- For repairs, renovation, alterations, or furnishing costs for the house or flat
- For meeting cost escalations in under-construction flats for existing Home Loan borrowers
- For purchase of land or plot for house construction
Loan Amount
For construction, additions, or purchase of a house/flat: A need-based loan will be provided based on the project cost and the borrower’s ability to repay.
For purchasing land/plot for building a house: The maximum loan amount is Rs. 50 lac.
- AGM RAM/iRAM and CHCAC, and higher authorities may approve loans of up to Rs. 100 lac for Metro and State Capitals.
- ZOCAC and higher authorities may sanction loans for the purchase of land/plots for house building based on the merits and genuineness of each case, as well as the borrower’s repayment capacity, after confirming the realistic valuation of the land/plot as follows:
- Maximum of Rs. 300 lac at all centers.
- Maximum of Rs. 500 lac at state capitals and metro centers, only for land/plots allotted by State Development Authorities or State Housing Boards. (Note: Subsequent sales of plots allotted by government bodies will be considered as purchases from private entities.)
- It should be ensured that the loan amount for purchasing land/plot for house construction does not exceed 60% of the eligible home loan amount based on repayment capacity.
For Composite Loan (plot purchase and construction): The loan amount will be determined based on the project’s cost and the borrower’s repayment capacity.
For repairs / renovation / alterations: Maximum Rs.50 lac.
- The cost of furnishing can be included in the project cost, up to a maximum of 15% of the Home Loan amount or ₹50 lakh, whichever is lower, and must fall within the prescribed Loan to Value (LTV) ratio. The repayment period for this will match the duration of the Home Loan, with the limit assessed at the time of loan approval.
- Home Loan borrowers can opt to finance the premium for a one-time credit life insurance cover, which is available on a voluntary basis. This cost will be in addition to the main loan amount and will require the borrower to meet the prescribed margin, maintain the LTV ratio, and demonstrate repayment capacity.
- The loan amount will be based on the cost of the unit, which is the lower of the realizable value or sale consideration value.
- Additionally, the cost of car parking will be included in the project cost of the house or flat when granting the Home Loan.
Permissible Deduction
| GAS/I | Max. Permissible Deduction of GAS/I |
| Upto Rs.5.00 lakh | 50% |
| Above Rs.5.00 lakhs upto Rs.10.00 lakhs | 60% |
| Above Rs.10.00 lakhs | 70% |
Margin
| Parameters | Margin | |
| For All purposes except to purchase of Land/Plot | Housing loan Upto Rs.30 lac | 20%/15%# |
| Housing Loan above Rs. 30 lac and Upto Rs.75 lac | 20% | |
| Housing Loan above Rs.75 lac | 25% | |
| Purchase of Land/Plot for House Building | 25%* | |
- A higher rate of interest based on the card rate will apply in these cases. Borrowers should be informed about this before the loan is sanctioned.
- The borrower’s CIC score must be 680 or above, or -1 & 0. For joint borrowers, each individual’s CIC score must also be 680 or above or -1 & 0.
LTV
| Outstanding Loan | LTV Ratio (%) | Risk Weight (%) |
| Upto Rs 30 lakhs | <=80 | 35 |
| >80 and <=90 | 50 | |
| Above Rs. 30 lakhs and upto Rs. 75 lakh | <=80 | 35 |
| Above RS 75 lakh | <= 75 | 50 |
Charges such as stamp duty, registration fees, and other documentation expenses paid by the borrower will not be counted toward margin money. However, if the borrower acquires a plot from their own funds within 12 months before submitting a home loan application for house construction, the acquisition cost of the plot can be considered as part of the margin money. In such cases, the lower value between the registered value and the realizable value (RV) will be used. If the plot/land is not considered for margin, its valuation is not mandatory.
Additionally, to support affordable housing for economically weaker sections (EWS) and low-income groups (LIG), the cost of stamp duty, registration, and other documentation fees may be included in the cost of the house for calculating the Loan-to-Value (LTV) ratio, provided the cost of the house does not exceed ₹10 lakh.
For home loans up to ₹30 lakh, the margin clause applies if the borrower’s Credit Information Company (CIC) score is 700 or above, or -1 & 0 (for joint borrowers, all borrowers must meet the same CIC score requirements). This clause does not apply to loans solely for the purchase of plots or land for house construction.
RATE OF INTEREST FOR 3RD OR SUBSEQUENT HOUSE/FLAT
- Any housing loan sanctioned for the purchase of a third or subsequent house/flat will be classified as Commercial Real Estate (CRE), and the rate of interest (ROI) will be applied accordingly.
- For non-CRE loans, the standard interest rate applicable to the first or second house will be charged. CRE classification is based on the number of houses owned, regardless of the number of home loans taken.
- For CRE loans, since the bank is required to maintain a higher capital charge and provisioning on standard loans, an additional 0.50% interest over the normal rate will be applied.
SECURITY:
Equitable/registered mortgage of the property.
DISBURSEMENT:
- Borrowers who have bought built-up (or under-construction) property with their own money can request reimbursement for their home loans within three months of purchase. This request must be approved by AGM-RAM/iRAM/CHCAC or higher officials after checking the source of funds used for the purchase.
REPAYMENT:
- For the construction or addition of a house/flat, or the purchase of a ready-built house/flat: 30 years including any moratorium period.
- For repairs, renovations, or alterations to the house/flat: 15 years including any moratorium period.
Repayment Holiday (Moratorium Period)
- For construction or additions to a house/flat: Repayment will begin upon the completion of construction (including additions) or 18 months from the date of the first loan installment, whichever occurs first.
- For repairs, renovations, or alterations to a house/flat: Repayment will start upon completion of the work or 6 months from the date of the first loan installment, whichever is earlier.
- For the purchase of a ready-built house/flat or land/plot: Repayment will commence after possession or 3 months from the date of the advance, whichever comes first.
- For under-construction flats/houses developed by approved private builders: Repayment will begin once possession is handed over to the purchaser (borrower), or after a maximum of 48 months, or as declared in RERA by the Builder/Developer, whichever is earlier, from the date of disbursement of the first installment of the loan.
Repayment of the loan, including interest, should not extend beyond the borrower’s age of 70. For joint loans, it should be ensured that at least one joint owner can repay the loan up to a maximum age of 70. The AGM RAM/iRAM/CHCAC & above may relax the repayment period up to 75 years of age.
Furthermore, the Branch/RAM/iRAM incumbent or sanctioning authority may consider the repayment period based on the co-borrower’s age (who is not a co-owner), with a maximum limit of 70 years, depending on the merits of the case. The AGM RAM/iRAM/CHCAC & above can extend the repayment period based on the co-borrower’s age (who is not a co-owner), up to a maximum age of 75, subject to due diligence and merit.
PENAL INTEREST
If a loan is sanctioned for the purchase of a plot or land and the construction of the house is not completed within three years from the date of disbursement, or if the plot or land is sold, a penal interest of 2% above the prescribed rate will be charged from the initial date of loan disbursement. However, the Zonal Manager and above may reduce the penal interest rate by a maximum of 1% per annum based on the merits of each case.
CRE or Non-CRE Home Loans in PNB Lens
To keep track of CRE (Commercial Real Estate) and Non-CRE Home Loans, details entered in PNB Lens will now be added to ‘Free Text 7’ in the MIS Details of Home Loans in CBS.
Extra Point
Housing loan proposals for NRIs/OCIs submitted by overseas offices will be processed and sanctioned centrally at iRAM Delhi (6666) in Karol Bagh. Proposals that exceed the authority of this iRAM will be forwarded to CHCAC and above (Delhi Zone) for consideration.