RBI rate cut effect: National Housing Bank cuts lending rate by 0.25 pc
National Housing Bank (NHB), the regulator for housing finance companies, today reduced its benchmark lending rate by 0.25 per cent to 9.75 per cent, within hours of RBI key policy rate cut, thereby setting the pace for cheaper home loan rates.
"The floating rate Prime Lending Rate (PLR)-linked refinance portfolio of NHB will now be repriced at 0.25 per cent less," the regulator said in a statement.
Earlier in the day, RBI reduced short-term lending rate called repo by 0.25 per cent to 7.75 per cent and cash reserve ratio (CRR) by similar margin to 4 per cent, releasing Rs 18,000 crore primary liquidity into the system.
Also the NHB, decided to reduce interest rate on special refinance scheme by 0.25 per cent.
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The refinance rate has now been reduced to 8.25 per cent from 8.50 per cent in respect of loan up to Rs 5 lakh and 8.50 per cent from 8.75 per cent per annum for loans up to Rs 10 lakh.
The scheme provides long term fixed rate refinance at affordable rates of interest for construction or purchase of houses in urban areas to people in the lower income segments, including those engaged in the informal sector, it said.
There is need for creating a long-term fixed interest rate market for housing, particularly for the low and moderate income households who may not be able to absorb the volatilities in the interest rates under the floating regime, it added.
Under the scheme, it said, NHB provides
