The interest rate competition has resulted in top three lenders to cut their home loan rates to 8.40 percent. For women borrowers, the rates are lower at 8.35 percent.
After ICICI Bank’s rate revision on Monday morning, by evening HDFC Ltd also cut its interest rates on home loans up to Rs 30 lakh to 8.35 percent for women and 8.40 percent for the others.
After State Bank of India (SBI) and LIC Housing Finance, ICICI Bank, India’s largest private sector bank, had on Monday announced its decision to reduce interest rates by up to 30 basis points (bps) for home loans up to Rs 30 lakh in its bid to boost affordable housing loan segment.
With this reduction, salaried borrowers can avail home loans at among the lowest rates in the industry. Salaried women borrowers will get home loans at 8.35 percent for women and 8.40 percent for others, ICICI Bank said in a statement.
The reduced rate will be effective from May 15, 2017 for new borrowers.
Further, borrowers of ICICI Bank can also choose to link their home loans with I-MCLR-6 Months or I-MCLR-1 Year, claiming to be the first bank to offer such flexibility to customers.
ICICI Bank said, the customers opting for home loans in the affordable segment will also have the option to select the type of interest rate -- floating interest rate or a fixed interest rate for the initial two/three years followed by floating rate.
Earlier this month, state-owned bank SBI, which is also country’s largest bank and has the largest home loan market share, is offering home loans up to Rs 30 lakh to salaried borrowers at 8.35 percent. For loans above Rs 30 lakh, the bank will charge 8.50 percent. It will continue to charge 8.60 percent on loans above Rs 75 lakh.
Housing finance major LIC Housing Finance also launched its new home loan product ‘Griha Siddhi’ to offer similar rates of 8.35 percent to women and 8.40 percent to the rest for loans up to Rs 25 lakh.
Chanda Kochhar, MD and CEO, ICICI Bank, said, “With this announcement, customers of economically weaker section (EWS) and low income group (LIG) can avail the dual benefits of low interest rates from us and the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana. I believe that this initiative, along with the bank’s expansion of home loan business in tier II cities, will empower a larger section of customers to realise the dream of owning a new home."Prior to Monday's interest rate cut, HDFC had cut its rates for new customers to 8.50 percent in February.