Dena Bank on Wednesday said it will offer home loans at 8.25% — on a par with its one-year marginal cost of funds-based lending rate (MCLR) and the lowest in the industry — for loan amounts of up to Rs 75 lakh.
Dena Bank on Wednesday said it will offer home loans at 8.25% — on a par with its one-year marginal cost of funds-based lending rate (MCLR) and the lowest in the industry — for loan amounts of up to Rs 75 lakh. This is part of a limited-period offer available up to December 31, under which car loans will attract an interest rate of 9%. Women will be given car loans at 8.9%. Processing fee and related charges will not apply. Sources in the bank told FE that the rates will be applicable to borrowers during the offer period, irrespective of their credit score. In January, Bank of Baroda (BoB) had announced home loan rates equivalent to their MCLR, then at 8.35%. The offer, however, was available only to borrowers with a CIBIL score of 760 or above. In recent months, banks have reduced rates on home loans in an environment of relatively slow mortgage growth. State Bank of India (SBI) had said on November 2 that all home loans of up to `30 lakh to eligible salaried borrowers will attract an interest rate of 8.3%, as against 8.35-8.4% earlier.
Car loans at SBI are now priced between 8.7% and 9.2%, as against 8.75%-9.25% earlier. In October, growth in mortgages in the banking sector slipped to 12.8% year-on-year (y-o-y) in September from 13.2% in August, data released by the Reserve Bank of India (RBI) earlier this month showed. The total outstanding on mortgages in the banking system stood at Rs 9.08 lakh crore as on September 29. The y-o-y growth figure at the end of September 2016 was 18%, with outstanding housing loans in the banking system at Rs 8.06 lakh crore. Vehicle loan growth has also been relatively slow at 9.2% y-o-y in September 2017, significantly slower than 22.8% in September 2016.
Last month, ratings agency Crisil had written that demand for residential property is unlikely to revive in the next 12-18 months. “Though capital values have been under pressure over the past few quarters, a significant chunk of supply in many micro markets remain unaffordable,” analysts at CRISIL Research had said. Mortgage growth had begun to show signs of pressure in June as home buyers put purchases on hold in anticipation of prices correcting further amid uncertainty ahead of the implementation of the RERA. Apart from the tendency to fence-sit and concerns around job losses in some sectors, a preference for rentals and risks associated with delivery of under-construction projects, are also reasons for tepid demand, Crisil added.