Market yet to respond to rate cuts on home loans, share prices unaffected

Lower rates to aid loan demand for financiers who can offset discounts over the long tenure

The housing finance majors are trying to create demand during the festive period by cutting interest rates. Mortgage major HDFC has cut its minimum mortgage rate to 6.7 per cent. The NBFC is responding after cuts from State Bank of India (SBI), Bank of Baroda, Kotak Mahindra Bank, and Punjab National Bank (PNB). Most are offering rates between 6.5 per cent and 6.9 per cent.

Every lender is looking at the mortgage market as a relatively safe stream. Mortgage defaults are rare and, at least in theory, a recoverable asset exists in case of a default. Given corporate NPAs are