The largest home loan financer, HDFC has announced a 50 basis points cut in its home loan rates for the new borrowers. The rate cut was declared on January 17th, a day later than the announcement of deposit rate cut by 50 to 75 basis points.
According to the changed rates, floating rate home loans up to Rs 30 lakh will be offered at 9.75% while those above Rs 30 lakh will be extended at 10.75 to the new borrowers.
HDFC Vice-Chairman and Managing Director Keki Mistry said, "Our cost of fund has come down to comfortable levels to disburse loans at these rates. Most of our home loan borrowers fall below the Rs 30 lakh slab and, therefore, this cut in interest rates will help new customers. Also, with a slump in the property market, developers are offering homes at attractive prices. The realtors' price coupled with our revised rates should help customers buy homes now."
In December, HDFC had cut the home loan rates for both new and existing customers. At the same time, the firm had reduced its lending as well as deposit rates by 50 basis points. Following the rate cut, HDFC was offering floating rate home loans up to Rs 20 lakh at 10.25% and those above Rs Rs 20 lakh at 11.25%.
The new scheme of the firm that has relaxed interest rates for home loans in the Rs 30 lakh category is expected to mop up demand especially across the metros. This is because property prices in a metro city are usually priced above Rs 20 lakh. HDFC has become the first lender to announce reduced interest rates for home loans in Rs 30 lakh category.
The largest banks in the country such as State Bank of India (SBI) and ICICI Bank are offering home loans above Rs 20 lakh at 10.25% and 12.5% respectively.
As per government's directive PSU banks are offering home loans up to Rs 5 lakh at 8.5% where as loans between Rs 5 lakh and Rs 20 lakh are extended at 9.25%.
Following the reduction in key policy rates by the Reserve Bank of India (RBI) during the starting of this month, PSU banks are likely to cut their lending rates further by 50 to 75 basis points in the coming days.