The largest mortgage company of the country, HDFC Bank has renewed its teaser loan scheme for two weeks. The act by the bank has been a step to protect its market share when its peer and rival SBI has extended the teaser loans till April and its attracting customers through it.
HDFC has chosen a short tenor for its special loan scheme as it expects that a policy rate hike is about to come with the monetary policy coming up this April 20th.
The current teaser rates would be slightly higher than the rates that were charged till February when the bank had stopped this scheme. Under the revived plan, home loans will begin at 8.25% for the fiscal to March 2011, and 9% for 2012. This is compared with 8.25% till March 31, 2012, under the previous plan.
"We have been able to do it because of the cost of funds," said HDFC MD Renu Sud Karnad. "Our spreads are intact. In April, we realised that there was still a window where we can bring down the rates."
Most banks had stopped these special schemes when interest rates started showing a rising trend since January owing to high inflation in the country. SBI continued with its plan because of its strong deposit growth which attracted new customers.
"It was only in March when there was some tightening," said Ms Karnad. "So in April, things were back to normal. It's basically extending the scheme till April 30 to take care of the backlog." however, SBI continued with its plan.
"In March, we didn't want to commit and RBI had already increased the repo and reverse-repo rates," she said.
The loan disbursements for HDFC have been at its best for the month of March thereby making it the top private retail lender while ICICI Bank, the leader till now lagged behind.
The special scheme is applicable for those customers who take atleast part of disbursement before 30th June 2010. All customers whose loans are fully undisbursed as of April 14 have been given an option to convert the product without any conversion fees.
HDFC charges 8.75% on floating rate loans up to Rs 30 lakh, 9% between Rs 30 lakh and 50 lakh and 9.25% for loans above Rs 50 lakh. "We have seen some changes in the economy which could influence some rate hike," says Ms Karnad.