Housing Development and Finance Corporation (HDFC), the country’s largest housing sector lender, today slashed its home loan rates by 50 basis points (bps) following a deposit rate cut by 50-75 bps yesterday. The private sector lender would now disburse floating rate home loans up to Rs 30 lakh at 9.75 per cent and loans above Rs 30 lakh at 10.75 per cent to new borrowers.
“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,” said HDFC Vice-Chairman and Managing Director Keki Mistry.
Last month, HDFC had announced a 50 bps cut in lending and deposit rates for its existing and new customers. Following this, HDFC’s retail prime lending rate (PLR) currently stands at 14.5 per cent. The firm had said that it would offer floating rate home loans up to Rs 20 lakh at 10.25 per cent, while loans above Rs 20 lakh would cost 11.25 per cent a year. The average loan size of HDFC has been estimated at Rs 15 lakh.
The latest offer would widen the scope for customers to find out homes at more affordable rates, especially across metros such as Mumbai, Delhi and Bangalore, where most of the properties are usually quoted above Rs 20 lakh. So far, none of the lenders have come out with special rates for home loans in the Rs 30 lakh category. At present, State Bank of India (SBI), the country’s largest bank, offers home loans above Rs 20 lakh at 10.25 per cent and ICICI Bank at 12.50 per cent.
Public sector banks currently offer home loans up to Rs 5 lakh at 8.5 per cent and loans between Rs 5 lakh and Rs 20 lakh at 9.25 per cent. Taking a cue from the Reserve Bank of India’s (RBI’s) cut in key lending rates earlier this month, public sector banks had told Business Standard that they would go for another 50-75 bps cut in lending rates in the coming days.
According to sources, Syndicate Bank would lower its benchmark PLR by 75 bps to 12.50 per cent from January 17.