Hudco slashes home loan rates

To be reduced on monthly basis, the housing loan product by Hudco will bethe lowest among the housing finance institutions. The revised interest rates will be effective from Monday.

"Keeping inn view of the expected reduction in the borrowing cost of thecorporation, we have decided to pass on the benefit to individual hoem loanaspirants” the chairman and the managing director of Hudco, V. Sureshannounced at a hurridly called press conference here on Saturday.

He said the corporation’s housing loans will have the least outgo ascompared to other HFIs due to the difference between the reduction ofbalances on monthly and annual basis.

“The overall benefits available to Hudco Nowas applicants varies from Rs13,000 to Rs 5,27,000 depending upon the loan amount and repayment periodwhich substantially reduces the effective interest rate” Suresh added.

Alos, there is no re-payment charges levied under the schemes floated byHudco, it has also offered the borrowers an attractive option of saving stwo months instalments if the repayments are on time for the entire tenure.

The corporation has so far released Rs 813 crore through its retail windowin its first year of operation and sanctions amount to Rs 1264 crore, hesaid.

The corporation is also considering a tie-up with a national bank toprovide facility to borrowers in about 180 cities to avail loans anddeposits remittances, Suresh added.

Housing Development Finance Corporation (HDFC) had slashed interest rates on home loans by 25 basis points last week. It reduced its retail prime lending rate (RPLR) by 25 basis points to 12.50 per cent. Consequently, all floating rate loans — linked to RPLR — will be priced at 12.50 per cent.

The institution’s fixed-rate home loans are now pegged at 13 per cent, down from 13.25 per cent. The new rates will take effect from May 8. Despite the rate cut, home loans by ICICI are still cheaper than that of HDFC. ICICI offers one-five year loans to resident Indians at 11.25 per cent, six to 20 year loans 12.75 per cent and 21-3- year loans 12.85 per cent. In effect, HDFC’s 15-year fixed rate loan is 25 basis points costlier than the comparable maturity fixed rate loan of ICICI. The term lending institution does not offer floating rate loan.