Good news for home loan borrowers, LIC Housing Finance reduces rate to all-time low of 6.90%

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26 Aug, 2025 12:21

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India's leading housing finance mortgage loan firm LIC Housing Finance Ltd (LICHFL) on July 22 announced it has reduced interest rate to an all-time low of 6.90 percent for new home loan borrowers having CIBIL score of 700 and above.

The rate of interest for home loans up to Rs 50 lakh starts from 6.90 percent for borrowers with a CIBIL score of 700 and above, it said in a statement.

The firm said for a loan above Rs 50 lakh, the rate of interest is 7 percent onwards for a similar score.

"Home loan interest rates are at an all-time low for the company and thereby resulting in low EMI payment. Attractive price points and affordable EMI will aid in addressing the demand side for buying homes," LICHFL Managing Director and Chief Executive Officer (CEO) Siddhartha Mohanty said.

Through this product, the company is trying to create demand, he told reporters.

In April, the home financier had cut its home loan rates to 7.5 percent for new home buyers having a Cibil score of 800 and above.

Mohanty said there has been a softening of the cost of funds after a reduction in repo rates by Reserve Bank of India (RBI) in recent months. The company's cost of funds currently stands at around 5.6 percent.

He said below 25 percent of the company's total book is under moratorium. Of its construction finance loan book of Rs 13,000 crore, around Rs 8,500-9,000 crore is under moratorium.

The housing finance company also launched a special home loan product, Griha Varishtha, for pensioners. The tenure is till attainment of 80 years of age or maximum up to 30 years, whichever is earlier.

This specially designed product caters to retired or serving employees of PSU insurers, Central/state government, railways, defence, banks, among others entitled to a pension under Defined Benefit Pension Scheme.

For higher loan eligibility, the applicant can also jointly apply with their earning children.

Additional benefits under this scheme include six Equated Monthly Installments (EMI) waiver for customers going for ready to move units or 48 months moratorium period for purchase of under-construction units.