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Mumbai, March 30: Signalling a marginal increase in housing finance rates, IDBI Home Finance, a subsidiary of Industrial Development Bank of India (IDBI), will raise the floating rates on its home loans by 25 basis points with effect from Thursday.
Housing Development Finance Corporation (HDFC), which had launched a special discount housing scheme offering cheaper floating rates in certain category, is withdrawing the scheme on Thursday.
HDFC’s discounted scheme was running parallel with all other schemes which were carrying higher interest rates. Immediately after increasing the rates by 50 basis points after the October credit policy, HDFC chairman Deepak Parekh had maintained that there might be a hike of 50 basis points in the interest rates in April. However, with the current high liquidity in the system and competition by banks to expand the housing portfolio, the interest rates are unlike to go up before the next credit policy which is scheduled on April 28, said analysts.
IDBI Home Finance’s revised rate for loans up to five years will now be 7.75%, for above five years and up to 15 years it will be 8.25% and for above 15 years and up to 20 years the rate will be 8.5%, the company said in a statement on Wednesday.
The interest rates on fixed-rate loans remain unchanged. The new rates will apply to all existing and new borrowers. IDBI Home Finance had not changed interest rates despite a rise in the benchmark reverse repo rate by 25 basis points to 4.75% in October, the central bank’s first increase in four years.
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