Global banking major HSBC has introduced a fixed rate product for home loans and loans against property. For the home loans, the new rates will only be available to the customers for one to five-year period and the loan against property for five years.

The scheme that has been introduced by the bank comes with the two options for the customers. In the first option, the customer will be allowed to pre-pay the loan amount subject to certain conditions and in the second option; the customer agrees not to make the pre-payments during the fixed rate period.

When a customer applies for a fixed rate home loan for the tenure one year to five years, then the rate of interest applicable will be 11.25 per cent to 11.75 per cent. Likewise, in the case of loan against property, that is available to the customers only for five-year tenure is disbursed at the rate of 12.5 per cent and 12.75 per cent with the pre-paid option.

After the tenure of the fixed rate is over, then the loan amount will be automatically converted into the floating rate at a margin of 2 per cent for the home loans and 3.25 per cent for loans against property. The notable part here is that the HSBC bank will provide a discount of 0.25 per cent for every tenure to the customers if they do not opt to pre-pay the loan.

HSBC India Head Consumer Assets Manish Sinha said, “The fixed rate product is a distinctive addition to our varied range of product offerings. We have extended this product to loans against property as well. There are many customers who do not prepay their loans within the first 5 years, and seeing this trend, we have introduced this product wherein they will be able to hedge against interest rate risk on loan payments. These unique features strongly reinforce our understanding of customer benefit.”