HDFC, country's largest mortgage lender, on Monday cut benchmark lending rate on housing loans by 0.25 percent to 9.65 percent, a move which will lower the EMI for borrowers. The effective home loan rate for new customers would be 9.65 percent, while for women borrowers, it would be 9.60 percent, HDFC said in a statement. The existing rate for new customers is 9.9 percent, whereas for women, it is 9.85 percent.
This reduction, effective tomorrow, would benefit all customers, it added. The reduction in the Retail Prime Lending Rate (RPLR) will also be applicable on loans to Non-Resident Indians (NRIs)/ PIO card holders, the statement said. HDFC had recently made similar reduction in its deposit rates across all maturities.
Following the easing of monetary policy by RBI, country's largest lender SBI reduced its base rate or minimum lending rate by 0.40 percent, setting-off a series of rate cut announcements. Later, it transpired that SBI hiked its spreads on home loans by 0.20 percent in order to protect its margins. SBI's standard offering to non-female applicants currently stands at 9.55 percent, while HDFC offers the same at 9.90 percent.
The rate cut has been triggered by the Reserve Bank revising downward its benchmark short-term lending (repo) rate by 0.50 percent in its fourth bi-monthly monetary policy review. Following this, about 20 banks from public and private sectors have cut interest rates by up to 0.40 percent. Market majors like ICICI Bank, Punjab National Bank, Bank of Baroda, among others, have already cut rates.
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