Published on: May 17, 2015 @ 13:33
For the first time, after a gap of more than four years, the home loan rates have dropped down to single digits. All top lending banks have brought down their home loan interest rates and it appears to have settled around the 9.90 per cent level. Both private and nationalized banks have lowered their lending rates to 9.90 per cent from April onward.
Almost all top lending banks, including HDFC, SBI, ICICI Bank, Dewan Housing, India Bulls Housing etc. have announced the reduction in their home loan rates.
SBI announced a reduction of 10 basis points in its home loan rate. This is the second reduction by SBI to regain its position as the cheapest home loan provider in the country. Now a new borrower at SBI will pay the home loan interest at 9.90 per cent rate. But if the applicant is a woman, then the applicable interest rate will be 9.85 per cent.
ICICI Bank has also come out with the same interest rates on home loan and is equal in lending rates of State Bank Of India. The country’s largest private lending bank ICICI Bank has announced that they have lowered their lending rates to 9.90 per cent from April onward. It announced a 25 basis point reduction in its benchmark base rate, and it said it will continue to maintain the same spread for home loans. which means that woman and low-income borrowers will get loans at 9.85 per cent, 10 basis points above its base rate of 9.75 per but for all other borrowers, loan will be available at 9.90 per cent, 15 basis points above its base rate.
ICICI Bank has also announced that it will also offer 10 year fixed rate loans at 9.90 per cent for borrowers upto Rs 30 lakh. The 25-basis-point reduction in the base rate with effect from April 10, 2015 will benefit all existing customers of floating home loans.
HDFC announced a 20 basis point reduction in its base rate and offers home loan interest rate at 9.90 per cent. HDFC has cut lending rates for woman borrowers by five basis points to 9.85 per cent from 9.9 per cent earlier to make its loan pricing at par with that of rivals – State Bank Of India and ICICI Bank. HDFC announced that the new product christened ‘Woman Power’ offers a different rate of interest exclusively for woman borrowers, as against 9.9 per cent charged for other borrowers. According to HDFC MD Renu Sud Karnad it is aimed at promoting house ownership among woman and give them the confidence of owning a house. The new scheme will be subject to conditions like the woman being sole or joint owner of the property.
She also added that the reduced rate will apply to home loans, home improvement loans, home extension loans and refinance loans. Besides, loans for financing housing plots for home construction will come at 9.9 per cent. With this cut HDFC’s offering comes at par with others like SBI and ICICI Bank, which offers home loans to woman at 9.85 per cent.
With the slow down in the economy and slow demand from the corporate segment, retail has acquired greater prominence in banks’ strategies. Within the retail, the high value and safer home loans are a preferred choice. The reduction in the home loan interest rates will be available to all the residents as well as non-resident borrowers.
Dewan Housing Finance and India Bulls Housing Finance, too, have announced that they have lowered their lending rates to 9.90 per cent from April onward, in line with the other top lending banks of the country.
All banks have brought down their interest rates following a nudge by RBI governor Mr. Raghuram Rajan in his policy statement on April 7. Prior to this all banks were providing home loans at 10.10 per cent. But now lending rates have dropped down to single digits to 9.90 per cent for general borrowers and 9.85 per cent for woman by some banks. After a gap of so many years, this is a welcome step taken by the lending bank.
Ajay Verma, founder, and writer of The Housing World, a real estate and mortgage news website. He has over fifteen years of rich experience in the above-mentioned industries.