HDFC cuts home loan rates by up to 0.45%

Bank of India also reduced its home loan rates by 0.9%

Taking cue from banks, country's largest mortgage lender HDFC today reduced its home loan rates by up to 0.45%.

Loans up to Rs 75 lakh will attract interest rate of 8.7% per annum, while it will be 8.75% for higher amounts, HDFC said in a statement.

A woman applicant will get a discount of 0.05% in interest rate. HDFC's earlier benchmark rate was 9.1%.

The revised rates are effective from today.

"Over the past couple of months we have seen a drop in our marginal costs of funds and as always HDFC has ensured that benefit is passed on to its customers," said Renu Sud Karnad, Managing Director, HDFC.

Meanwhile, public sector lender Bank of India too announced reduction in benchmark lending rate by up to 0.9%.

For one year, the MCLR, or marginal cost of funds based lending rate, is now 8.50%, down 0.75%.

However, overnight MCLR has been reduced by 0.9% to 8.1% effective January 7.

Housing, auto and corporate loans are all set to become cheaper with several PSU and private banks steeply reducing benchmark lending rate by up to 1.48% after spurt in deposits following demonetisation.

On January 1, India's largest lender SBI had reduced the lending rate by a good 0.9% after Prime Minister Narendra Modi in his new year eve address urged banks to focus on the needs of poor and middle classes.