Now, home loans at just 9.99% floating rate from GE Money

Excerpts from Power Breakfast on CNBC-TV18 Watch the full show » Nifty BSE | NSE 29/05/12 Are Mutual Funds betting on Nifty?

Loan market could be in for a serious price war. GE Money has launched a home loan product with a floating rate of 9.99%, much cheaper than the 11% being charged by market leaders.

 

Wizard Home Loans , a joint venture between GE Money and Australia's mortgage major-Wizard, hopes to bag 30% of the Indian home loan market in the next there years by offering the cheapest rate. The company has launched its first floating rate product at 9.99% for a minimum of 20 years for a minimum loan of Rs 10 lakh. GE claims its current cost of funds are much lower than the 9.5% being projected by competition and hence, the competitive rate.

 

Mark Bouris , Chairman, Wizard said, "One of the things India has enjoyed over the last few months is a lower cost of funds. I think it's not necessarily being passed on, on a retail rate. This is not an introductory price, this is a rate we and our partners have worked out keeping in mind our margins."

 

Besides this, Wizard home loan branch offices will be run by owner-operators, like franchises, bringing down the total operating costs. Never the less, since NBFCs are not allowed to take deposits, maintaining the current cost funds will be a challenge.