India Mortgage Guarantee Corporation (IMGC) expects demand for its products to come down in the next few months as the demonetisation move weighs on home loan growth in the country.

From about 20 per cent growth now, home loan growth is expected to slow to 15 per cent this fiscal, Amitava Mehra, Chief Executive Officer, IMGC, said.

“As lenders see a reduction in volume, we will also see reduction in our volumes. The recent demonetisation move will hurt new originations but is unlikely to impact loans already written,” Mehra told BusinessLine .

However, in November this year, IMGC, which has a monthly throughput of about ₹100 crore, has not seen any fall in volumes, Mehra added.

A bigger positive that will come out of this (demonetisation) is that home loan amounts will increase as the cash component decreases. This could prompt lenders to look at more guarantee products. In the short term, demonetisation will hurt demand in the market, say, for the next six to nine months. “There is also a conjecture of prices coming down, but we have not heard of anything like this,” Mehra added. Investors will be out of the market and only those who want to self-occupy will remain, he said Fresh logins have reduced. The impact will be felt, going forward.

Website

IMGC, which is now three years into its journey and the sole provider of mortgage guarantee in the country, is revamping its website to make it completely consumer facing.

The revamped website will have calculators, into which consumers can feed in details of income and calculate the amount of loan that can be availed with the guarantee product. It will also provide links to lender partners so that consumers can input their data and electronically send it to the lender.

Mortgage guarantee is a financial product which compensates lending institutions or housing finance companies for losses that may arise when a home owner defaults on a mortgage loan.

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