Affordable housing finance set to get expensive now
Interest rates on affordable housing finance which are hovering around 6.50-7% will increase by 100-120 bps in FY23
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Easy Home Finance (EASY), ICICI HFC, have entered into a co-lending partnership to disburse affordable home loans in India. This partnership will leverage ICICI HFC's expertise in affordable housing segment and EASY's tech capabilities to enable quick disbursement of affordable home loans
Mumbai: Interest rates on affordable housing finance which are hovering around 6.50-7% will increase by 100-120 bps by the end of the current financial year.
Moreover, home mortgages are growing at 15-20 per cent growth rate in the country, and in the previous seven years, it has grown in the same pace except for the year 2020-2021.
Talking to Bizz Buzz, Rohit Chokhani, Managing Director, Easy Home Finance (EASY), India's leading mortgage-tech company, says, "The home finance in the segment of 6.50 per cent to 7 per cent will see increase of 100-120 bps by the end of this fiscal year, and in this segment there may be a slight slower growth. The reason is fairly straight forward. Before Covid when RBI repo rates were 5.25 to 5.50, the affordable housing rates were between 10 per cent to 15 per cent, when the RBI rates were 4 per cent, the rates were similar, and the rates continue to remain same. Hence in the affordable housing segment, where house is of essential need, there will be continued demand."
He maintained that home mortgages are growing at 15-20 per cent in the country, and in the previous 7 years, it has grown in the same pace except for the year 2020-2021.
Talking about the business projection of his company for the current fiscal, Chokhani said that he sees a growth of 30 per cent monthly or 360 per cent annually.
Meanwhile, EASY, along with ICICI Home Finance Company Limited (ICICI HFC), one of the India's leading affordable housing finance companies, have entered into a co-lending partnership to disburse affordable home loans in the country. This partnership will leverage ICICI HFC's expertise in affordable housing segment and EASY's tech capabilities to enable quick disbursement of affordable home loans and make the dream of owning a home come true, for millions of Indians.
EASY is a pioneer in the mortgage tech space in the Indian subcontinent. On the other hand, as one of the leading affordable housing finance company, ICICI HFC has been instrumental in providing a range of regular home loan, affordable home loan, LAP, Micro LAP, home improvement loan, and construction finance to developers. The co-origination, underwriting and disbursement activities from both the parties together will enable a seamless process for new home buyers. Easy's asset-light model of neo banking mortgage and a greater reach for digital home loans combined with rural–urban connect of ICICI HFC will help customers get home loan processed faster.
Commenting on the development, Chokhani, said: "Our perennial alliance with ICICI Home Finance is a significant step towards providing affordable home loans and reaching added Indian households. In a bid to offer paperwork-efficient, cost-effective, and hassle-free home loans in the market, we are embarking on this journey. As a common motive of being more customer-centric and broadening our geographical footprint, we aim at making our customers' home ownership journey easier while offering them highly-interactive digital experiences. Furthermore, customers will now be able to enjoy the best of both worlds; the trust and experience of ICICI HFC and the tech-focused offerings of easy."
Anirudh Kamani, Managing Director and CEO, ICICI Home Finance Company Limited, said: "We are excited to partner with Easy Home Finance to take our vision to make the dream of owning a home come true for millions of Indians. This partnership will help us provide affordable home loans faster and a seamless home buying experience for our customers. We look forward to a long term relationship with Easy Home Finance and work towards our common goal to support Housing for All".
The partnership will benefit customers in numerous ways such as eradicating the hassle of long home loan procedures and paperwork.
Easy Home Finance Limited earlier had announced a MaaS (Mortage as a Service) partnership with ESAF Bank, and now with ICICI Home Finance. Its next step is to expand and grow as India's leading mortgage tech company. All this is only possible with EASY's proprietary homeownership technology platform, 'Fox', which will be used throughout all their partnerships. The company had earlier raised its Series-A round from domestic private equity Xponentia Capital, as well as Harbourfront Japan, Finsight VC, RaSa Future Fund, Navida Capital Sweden & Integra Software.
