After State Bank of India, private sector players ICICI Bank and HDFC have slashed home loan rates by up to 30 basis points for loans of up to Rs 30 lakh, intensifying the competition in the segment.
With this reduction, salaried borrowers can avail home loans at among the lowest rates in the industry. Salaried women borrowers will get home loans at 8.35 per cent and others at 8.40 per cent, ICICI Bank said.
New home loans rates for up to 30 lakh for women will be 8.35 per cent and for other others, 8.40 per cent, HDFC Ltd said in a statement. For home loans between Rs 30 lakh and Rs 75 lakh the interest remains unchanged at 8.50 per cent for all borrowers. For home loans above Rs 75 lakh it is now 8.55 per cent, from 8.75 per cent for all, HDFC said.
The new rates are effective from May 15. Last week, State Bank of India had reduced its affordable home loan rates by up to 25 basis points, offering a lower rate of 8.35 per cent to new women borrowers. With Monday’s cut, the three largest players offer similar prices for new affordable home loans.
According to banking sources, this move would be followed up by other lenders both in private and public sector space to stay in the competition. ICICI Bank said its customers taking home loans in the affordable segment will also have the option to select the type of interest rate. In both these cases, the reduction in interest rates is 30 basis points from the previous rates.
They can enjoy the benefit of floating interest rate or a fixed interest rate for the initial two/three years followed by floating rate. “Further, borrowers can also choose to link their home loans with Marginal Cost of funds based Lending rate MCLR-6 Months or I-MCLR-1 Year. The bank is the first to offer such flexibility to customers. The reduced rate will be effective from May 15, 2017 for new borrowers,” it said.
ICICI Bank MD Chanda Kochhar said the bank is committed to supporting the government’s vision to provide housing for all by 2022. “In line with this commitment, we have reduced the home loan interest rates for the affordable housing segment. With this announcement, customers of economically weaker section (EWS) and low income group (LIG) can avail the dual benefit of low interest rates from us and the credit linked subsidy under the Pradhan Mantri Awas Yojana,” she said.