Tags:
Journalism of Courage
Even as the banking system is preparing for higher interest rates,housing finance company HDFC Ltd has launched a special home loan product at a fixed rate of 8.25 per cent per annum up to March 31,2012 and the applicable floating rate for the balance term. This is 50 basis points lower than the existing rate of 8.75 per cent on its regular home loans up to Rs 30 lakh.
This is a flexible product with dual rates. The rate of 8.25 per cent per annum is applicable up to March 31,2012,for all new loans irrespective of the loan amount, HDFC said. However,it has kept the rates unchanged for existing customers. The HDFC move seems to be aimed at attracting customers who are worried about a rise in interest rates in the coming months,said a banking observer.
State Bank of India recently extended its special home loan scheme at 8 per cent interest rate by over four months to March 31,2010,providing relief to small home loan borrowers. SBI,which offers the special scheme under My Home Campaign,offers 8 per cent fixed interest rate for five years for loans up to Rs 5 lakh,with a maximum tenure of 10 years.
There is ample liquidity in the system. The banking system continues to park around Rs 1 trillion with RBI through reverse repo. We have been able to bring down our costs due to improved operational efficiency and good quality portfolio. Based on current marginal cost of borrowing a special festive offer is being made to new customers to reduce the cost for the home buyer, said Renu Sud Karnad, Joint Managing Director,HDFC.
This special festive offer rate is applicable to all new home loan customers who apply before January 31,2010 and take at least part disbursement before March 31,2010. While the fixed rate will remain the same irrespective of the loan amount the floating rate will vary with the loan amount, HDFC said. At the moment HDFC has three slabs loans up to Rs 30 lakh, between Rs 30 lakh and Rs 50 lakh and Rs 50 lakh and above.
In recent months,we have seen an increase in inquiry levels from prospective customers wanting to move into flats. Also the resale market is huge and documentation with regard to resale properties requires special attention,that too on a priority basis as the customers buying the property can take advantage by paying up quickly, Karnad said.
The prices of properties in the past couple of months have run up slightly across the country and more sharply in some parts of Mumbai and Delhi. The cost of acquiring a property came down significantly from its peak levels of 2008 due to a combination of factors such as drop in property prices,lower specifications and reduction in average size of the units. Further,interest rates have also softened which is bringing in a lot of prospective home buyers who were waiting to buy a home but had deferred their decision. Over the past couple of months,developers have seen an increase in sales inquiries.
