ABN home loan plan starts with 6% interest

ABN Amro Bank on Friday introduced the 'All Smiles Super Saver Package' where by the bank will offer home loans at a fixed rate of six per cent in the first year and 6.5 per cent in the second year. Subsequently, the prevailing floating rate of interest will be applicable.

As part of the package, the bank it will charge the same rate of interest irrespective of the term or the amount of loan sanctioned.

ABN Amro has also pegged its floating rates of interest at 7.75 per cent and fixed rate of interest at 8.25 per cent.

The floating and fixed home loan interest rates will get re-priced every six months and every three years respectively.

The ban said that the 'Super Saver Package' is designed to help customers manage their financial requirements during the first two years of the loan tenure. During this period, the rate of interest is significantly lower than the applicable floating rate of interest.

ABN Amro will also offer 'Loan Care' - an insurance policy (in association with its bancassurance partner - ICICI Lombard General Insurance Company) to mitigate risks on 'All Smiles Home Loan'.

Under 'Loan Care', customers' and their dependents are assured of their shelter as the outstanding in the loan is insured against uncertainties arising out of critical illness, disability (including permanent and total) arising out of accidents, unemployment and even death of the customer.

Combining the advantages of fixed and floating rates of interest, the bank offers its customers a mix of the two rates thereby protecting them from any unexpected rise in interest rates. Here, the customer has the freedom to choose between two combinations - a 60 per cent floating rate and 40 per cent fixed rate combination or a 80:20 combination.