MUMBAI: Mortgage lender Housing Development Finance Corp (HDFC) on Thursday announced a quarter percentage point cut in home loan rates.
Customers who apply for loans up to Rs 75 lakh on or before January 31. will be offered loans at 10.25 per cent, against 10.50 per cent earlier. The company said the disbursement of the first instalment must happen by February 28. The existing interest rate on a loan above Rs 30 lakh varies from 10.50 per cent to 11.25 per cent for different categories of customers and the tenure.
Keki Mistry, CEO, HDFC, said till September, home loan growth was pretty robust. After that the demand has been decent.“We maintain that our growth rate will be around 18-20 per cent in the medium term. “I believe, with inflation inching lower, RBI is unlikely to hike rates going forward.”
HDFC’s move comes close on the heels of the Reserve Bank of India keeping its policy rates on hold. This is the second bank after public sector State Bank of India to cut home loan rates. SBI has pared interest rates on home loans by 15-20 basis points.
Further, to encourage women to own a home, India’s largest bank has rolled out a scheme whereby it will offer them home loans five basis points cheaper than the rate applicable to others. One basis point is equal to one-hundredth of a percentage point.
This move, which comes at a time when credit demand on the corporate side is tepid and the bank has comfortable liquidity, could prompt other banks and non-banking finance companies to follow suit.
Even as it cut the home loan rates, SBI raised the slabs for home loans in view of the rising property prices, especially in the metros. The new slabs are — up to Rs 75 lakh (up to Rs 30 lakh earlier) and above Rs 75 lakh (above Rs 30 lakh earlier).
Henceforth, a uniform interest rate of 10.15 per cent will be charged on home loans up to Rs 75 lakh (against the current rate of 10.30 per cent for loans up to Rs 30 lakh).
The bank will charge 10.30 per cent interest on home loans above Rs 75 lakh (against the current rate of 10.50 per cent for loans above Rs 30 lakh).
Lower rate for women
Where a woman is the sole applicant or first co-applicant and also the sole or first co-owner of the property, the interest rate will be 5 basis points lower than the above mentioned rates, the bank said in a statement.
The revised home loan rates are effective from December 20.
According to the bank’s Web site, home loan customers with floating/fixed interest rates higher than the current rates can switch over to the current rates after paying 0.56 per cent fee.
A senior SBI official said: “We have aligned our home loan rates with what is prevailing in the market. We want to aggressively grow our home loan portfolio. In the first six months of the current financial year, our portfolio has grown by about Rs 10,500 crore to Rs 1,30,000 crore.”