ICICI set to slash home loan rates by 25-125 bps
George Smith Alexander
MUMBAI, MARCH 19: ICICI is set to intensify the rate war in the housing loan segment by offering loans at cheaper rates than those offered by the Housing Development Finance Corporation (HDFC).
ICICI is likely to cut the interest rates on home loans by around 25 basis points to 125 basis points (one quarter of a percentage to one and a quarter percentage) over the next few days. According to sources, ICICI is planning to merge two of its loan slabs (up to Rs 10 lakh and Rs 10-50 lakh) into a single block and raise the upper limit of the loans to Rs 1 crore.
For loans up to Rs 1 crore, sources said, the new rate of interest is expected to be around 13.25 per cent. At present, the interest rate on loans up to Rs 10 lakh is pegged at 13.50 per cent while loans in the Rs 10-50 lakh slab carries 14.5 per cent interest rate. Sources also said that for loans with a tenure of five years, the institution is likely to cut the rate of interest to 11.75 per cent from the current rate of 12 per cent.
HDFC has recently merged four loan slabs (up to Rs 10,000, Rs 10,001-10 lakh, Rs 10-15 lakh and Rs 15-50 lakh) into one uniform block and also raised the upper limit to Rs 1 crore.
HDFC has reduced its retail prime lending rate (RPLR) by 75 basis points to 12.75 per cent. Consequently, all floating rate loans-linked to RPLR-are now priced at 12.75 per cent. In the case of fixed rate home loans, the interest rate is at 13.25 per cent, down from 13.50 per cent.
LIC Home Finance has also reduced the interest rates on home loans by 25 basis points to 175 basis points and merged three loan slabs into a single slab of Rs 25,0001 to Rs 50 lakh. The single slab of LIC Home Finance has two sets of interest rates, depending on the term of the loan. The interest rate for a term of 15 years is 13.25 per cent while 16-year loan rates is pegged at 14 per cent.
Earlier, the lowest slab at LIC Home Finance-Rs 25,001-10 lakh-carried a rate of 13.5 per cent, the second slab Rs 10-15 lakh had 14.5 per cent interest rate while 15 per cent was charged on loans between Rs 15-50 lakh. Hudco has also reduced its interest rates by 100 basis points (one percentage). The Hudco rate in the highest loan category is 14.25 per cent.
-Indian Express Newspapers (Bombay) Ltd. |
