HDFCs Own Your House Scheme in Ernakulam

With just 30 percent of the cost of a house, saved over a period of time, a person can obtain a loan to cover the rest of the 70 percent, which is repayable over a period of 15 years, under a scheme started by the Joint Sector Housing Development Finance Corporation.  Over 10,000 people have already joined this self-financing scheme.  Those who join it need only save a fixed sum according to their means for a minimum period to be eligible fro a loan.   The HDFC pays an interest of six percent on the savings and charges 8.5 percent on the loan.  If more money is needed, it can be borrowed at the normal interest rate of 12.5 to 14.5 percent.  This interest rate is likely to be further reduced to attract more players to the hot Ernakulam Real Estate sector.
 
A saving of Rs.1209 per month enables a person after four years to get a loan of Rs.1.50 lakh.  Along with his own savings he will have over Rs.2.15 lakh for constructing his house.  The monthly saving to be deposited with the HDFC can be varied according to one’s capability.  Repayment will be at the rate of Rs.1, 511 per month, over 15 years.  The same amount if borrowed at the HDFCs normal Home Loan Account will carry an interest at 14.5 percent, the monthly installment being Rs. 2,100.  The minimum savings period in the HDFC scheme is 25 months but one can save up to seven years.
 
According to the latest annual report of this housing finance agency floated by the Industrial Credit and Investment Corporation of India the cumulative loan approvals since 1984-85 under its various schemes totaled to Rs.1, 486 crore, which have helped to construct over three lakh houses.
 
The HDFC loan facilities have helped people to own houses in over 1,600 towns and cities.  The loans were largely given to individuals, but institutions and organizations are making increasing use of its facilities for building houses for their employees or for enabling them to own houses.  Another recent development relates to loans for improving existing homes or for adding additional living spaces.