Joining the rate cut war, biggest mortgage firm HDFC and private sector lender ICICI Bank today cut home loan rates by 0.15 per cent, a move that may be followed by other lenders.Home loans up to Rs 75 lakh for women borrowers will now attract an interest of 9.15 per cent and for others it will be 9.20 per cent, HDFC Ltd said in a statement.
“Over the past couple of months, we have seen a drop in our marginal costs of funds and as always, HDFC has ensured that benefit is passed on to its customers,” HDFC Ltd Managing Director Renu Sud Karnad said.
For loans beyond Rs 75 lakh, the interest rate has been revised downwards to 9.25 per cent for women borrower and 9.30 per cent for others.
The new rate is effective from November 2, a day after the bank lowered marginal cost of funds based lending rate (MCLR) by 0.1 per cent.
According to analysts, the rate reduction effected by large players would put pressure on others to follow suit to remain in the competition.Since there is hardly any credit demand from corporate sector, most of the banks are chasing retail loans to keep their balance sheet ticking, analysts added.
“While the term loan provides customers with quick funds for immediate needs, the overdraft facility offers them flexibility to access funds instantly for expenses, as and when required,” the bank had said.
Those buying the overdraft loan from the bank would be able to utilise the funds for their personal needs such as education, medical treatment, home renovation, marriage and overseas travel, among others.
Customers will have the facility to avail a minimum 10 per cent of the total amount as term loan and maximum 90 per cent as overdraft.