State Bank of India (SBI) will launch a new product - SBI Reverse Mortgage Loan - for the benefit of senior citizens on October 12.Senior citizens can avail of loans, released in monthly or quarterly instalments or as a lumpsum payment at the beginning, against the security of their self-acquired, self-occupied houses. The loan need not be repaid by the borrowers during their lifetime, and they will also continue to stay in their houses during their lifetime."Thereafter, an option is available to the legal heirs to repay the bank loan and redeem the house property. If this option is not exercised, bank will sell the property and liquidate the loan. Surplus, if any, will be passed on to the legal heirs,"an official release issued by the bank today said.The loan carries a fixed interest rate of 10.75% p.a. subject to reset at the end of every five years along with revaluation of security and re-adjustment of loan instalments, if necessary. For a loan of Rs 1 lakh, the monthly payment to the borrower on a 10-year loan is Rs 468 and on a 15-year loan, it would be Rs 225. Similarly, for a loan of Rs 1 lakh, the quarterly payment to the borrower for a 10-year loan would be Rs 1,423/- and on a 15-year loan, it would be Rs 687, the release added.
