SBI Reverse Mortgage Loan
The SBI Reverse Mortgage Loan pays senior citizens a regular income against their self-owned home, without needing to repay it during their lifetime. Available to Indian residents aged 60 and above, it charges a single interest rate of 10.30% p.a. You keep owning and living in the house, and the loan is settled only from its sale after your lifetime.
SBI Reverse Mortgage Loan Interest Rates
The interest rate for SBI Reverse Mortgage Loan are as follows:
For SBI Pensioners | 10.30% (single rate, applicable to all borrowers) |
For Public | 10.30% (single rate, applicable to all borrowers) |
Eligibility Criteria
If you are a senior citizen looking to apply for this home loan scheme, you must meet the following criteria:
- Nationality – Indian resident.
- Single and joint borrowers are eligible.
- Age:
- Minimum age - 60 years.
- In case the spouse is a joint borrower – Spouse to be over 55 years of age.
- Loan amount:
- Maximum loan amount – Rs.2 crore for properties in NCR, Mumbai, Pune, Chennai, Ahmedabad, Bengaluru and Hyderabad, and Rs.1.5 crore in all other locations.
- Maximum loan tenure – up to 20 years, with the exact tenure (between 10 and 20 years) depending on the borrower's age.
Features and Benefits
If you are considering applying for this loan, here are the features and benefits:
- Attractive interest rates starting from 10.30% p.a.
- Low processing fee of 0.35% of the loan amount (minimum of Rs.3,000 and maximum of Rs.12,000, plus applicable GST).
- No hidden charges or fees.
- No prepayment charges in case you close the loan before the end of your loan tenure.
- The loan becomes due only when the last surviving borrower passes away or permanently moves out of the property, and it is then settled from the sale proceeds of the house.
- Every SBI Reverse Mortgage Loan carries a no-negative-equity guarantee, so neither you nor your legal heirs will ever owe more than the property's realisable value.
- Payments you receive under the SBI Reverse Mortgage Loan are exempt from income tax under Section 10(43) of the Income-tax Act, 1961.
Documents Required
Both salaried and self-employed individuals interested in applying for this loan must submit the following documents:
All applicants must submit:
- Employer ID card.
- Fully completed loan application form along with three passport size photos affixed to the form.
- ID proof document (any 1 of the following) – Passport, PAN card, Voter ID card, Driver’s License.
- Residence proof document (any 1 of the following) – Driver’s License, Aadhaar card, a most recent utility bill: water/electricity/telephone/piped gas.
Property documents to submit include:
- Construction permit, if applicable.
- All applicants - Allotment Letter/Sale Agreement with Stamp; Maharashtra applicants – Registered Sale Agreement.
- For ready to move property – Occupancy Certificate.
- All applicants - Property Tax Receipt/Electricity Bill/Maintenance Bill; Maharashtra applicants – Share Certificate.
- For new properties – Conveyance Deed.
- Blueprint xerox of Approved Plan and builder’s Registered Development Agreement.
- Bank account statements/payment receipts indicating all payments made to the seller or builder.
Bank account statements to submit include:
- Bank account statements for the past 6 months for all bank accounts held.
- In case of any past loans from banks/lenders – last year’s loan account statement.
Income documents for salaried employees/co-borrowers/guarantors:
- Latest 3 months payslips or salary certificate.
- Income Tax Return for the past 2 financial years or Form 16 for the past 2 years, acknowledged by the Income Tax Department.
Income documents for self-employed individuals/co-borrowers/guarantors:
- Address proof document for the business.
- Latest 3 years’ Income Tax Returns.
- Profit and Loss Account and Balance Sheet for the past 3 years.
- TDS Certificate with Form 16A, wherever applicable.
- Business License Details or an equivalent document.
- For professionals such as Chartered Accounts, Doctors, etc. – Certificate of qualification.
FAQs on SBI Reverse Mortgage Loan
1. What is the SBI Reverse Mortgage Loan?
The SBI Reverse Mortgage Loan is a home loan scheme that pays senior citizens a regular income against the mortgage of their self-owned residential property in India. Unlike a regular home loan, you do not have to make any repayments during your lifetime.
2.Who is eligible for the SBI Reverse Mortgage Loan?
Resident Indian senior citizens aged 60 years and above who own a self-acquired or self-occupied home in India are eligible for the SBI Reverse Mortgage Loan. Both single and joint applications are accepted, subject to the spouse meeting the applicable age criterion.
3.Can I apply for the SBI Reverse Mortgage Loan jointly with my spouse?
Yes, the SBI Reverse Mortgage Loan can be availed jointly with your spouse as a co-borrower, provided the spouse meets the minimum age criterion set by SBI. A surviving spouse can continue to live in the property and keep receiving payments after the other borrower's lifetime.
4.What type of property qualifies for the SBI Reverse Mortgage Loan?
A self-acquired or self-occupied residential property located in India, owned and occupied by the senior citizen applicant, qualifies for the SBI Reverse Mortgage Loan. The property is mortgaged to the bank but not sold or transferred.
5.Do I have to repay the SBI Reverse Mortgage Loan every month?
No, you do not have to make any monthly repayments on the SBI Reverse Mortgage Loan during your lifetime. Instead, the bank pays you, and the loan is settled later from the sale of the property.
6.When does the SBI Reverse Mortgage Loan become repayable?
The SBI Reverse Mortgage Loan becomes due only when the last surviving borrower passes away or permanently moves out of the mortgaged property. It is then settled from the sale proceeds of the house, or by the borrower's heirs repaying it from other resources.
7.Do I lose ownership of my house under the SBI Reverse Mortgage Loan?
No, you continue to own and live in your house for as long as you wish under the SBI Reverse Mortgage Loan. The bank only holds the property as security and does not take ownership unless the loan becomes due and remains unpaid.
8.What happens to my legal heirs under the SBI Reverse Mortgage Loan?
Your legal heirs may repay the outstanding SBI Reverse Mortgage Loan from their own resources to retain the property, or allow it to be sold to settle the dues. A no-negative-equity guarantee ensures neither you nor your heirs owe more than the property's realisable value.
9.Is the income I receive under the SBI Reverse Mortgage Loan taxable?
No, payments received under the SBI Reverse Mortgage Loan are exempt from income tax under Section 10(43) of the Income-tax Act, 1961. This makes it a tax-efficient source of retirement income for senior citizens.
10.Does the SBI Reverse Mortgage Loan charge a prepayment penalty?
No, SBI does not levy a prepayment penalty if you choose to close your SBI Reverse Mortgage Loan before the end of its tenure. There are also no hidden charges beyond the fees disclosed by the bank at the time of sanction.
11. What documents are required to apply for the SBI Reverse Mortgage Loan?
Applicants for the SBI Reverse Mortgage Loan must submit identity and residence proof, property ownership documents, and income documents for any co-borrower or guarantor, as listed in the Documents Required section above. Exact requirements can vary by applicant.
12.How do I apply for the SBI Reverse Mortgage Loan?
You can apply for the SBI Reverse Mortgage Loan by visiting your nearest SBI branch with the required application form, identity, residence and property documents. A bank official will guide you through eligibility checks and property valuation before sanction.
Karishma VP has over a decade of experience in content writing which includes over five years specializing in personal finance. Her career in BankBazaar has given her the opportunity to write on a wide variety of financial products ranging from credit cards and home loans to insurance policies and government schemes. She believes that an understanding of personal finance is an important step to leading an independent, empowered life. This has led to her being passionate about learning more about the BFSI sector and writing about personal finance as clearly, concisely, and accurately as possible to make it accessible to a larger audience through BankBazaar.
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