HDFC rates lower than SBI's for HOME LOAN

Apr 11 2015 : The Times of India (Pune)

HDFC rates lower than SBI's

Mumbai: TIMES NEWS NETWORK





Cuts Home Loan Rates By 20 Bps To 9.9% For All Borrowers

The country's largest housing finance company HDFC has brought down its lending rate by 20 basis points with effect from April 13 (100 basis points = one percentage point). Following the reduction, the corporation will extend loans at 9.9%, which is lower than the rate being charged by the State Bank of India.SBI, the country's largest bank, offers home loans at 9.95% for women and 10% for all other borrowers.
The reduction in interest rates by HDFC will bring down the equated monthly instalment (EMI) on a Rs 50-lakh loan (20 years' tenure) by Rs 663, from Rs 48,583 to Rs 47,920.
In a statement issued here on Friday , HDFC said the reduction would benefit all customers and the interest cost for existing borrowers will also go down.
ICICI Bank has segmented its home loans into vari ous categories, including women, salaried and self-employed. Until the rate cut, its cheapest loan was on a par with SBI and HDFC at 10.1%.Although, ICICI Bank has brought down its base rate by 25 basis points, it is not clear whether there will be a corresponding reduction in its home loan rate which stood at 10.1%. Sources said that the bank is reworking spreads on its home loans.
Prior to its 20-basis-point rate cut, Axis Bank, which has increased its activity in the home loan segment, was offering loans at its base rate of 10.15%. If spreads remain unchanged, loans would be available from 9.9% next week. However, it is not yet known whether the bank will continue with the same spread for new borrowers.
Speaking to TOI, Keki Mistry , vice-chairman and CEO, HDFC said that the cut in lending rates was an outcome of the reduction in the cost of funds for the corporation. HDFC has also reduced interest rates on its fixed deposits across maturities.The reduction in the RPLR (retail prime lending rate) will also be applicable on loans to non-resident Indians (NRIs).
All major banks reduced their interest rates this week despite Reserve Bank of India governor Raghuram Rajan keeping the repo rate on hold in his monetary policy on April 7. While Rajan held rates, he admonished banks for not passing on the earlier rate cuts to borrowers.