Soon, Yyou will get Lower Loan Rate with Home Cover

National Housing Bank, the regulator for housing-finance companies, is working on a broad framework with the Insurance Institute of India, which could reduce home loan rates by about half a per cent if borrowers opt for an insurance cover, aimed at mitigating default risk as well, said two sources familiar with the matter. “We are conducting a survey in association with the Insurance Institute of India to assess the feasibility of calamity (property) insurance," Sriram Kalyanaramannational director & chief executive officer, NHB, told ET confirming the matter.

“We are examining if taking an insurance cover while buying a home loan can lead to lower lending rates," he said. “An insurance cover should bring down the risk premium, which lenders can pass on to consumers. Going forward, we would come out with a broader framework once the exercise is over."