The private lender joins the league of banks that have announced a cut in home loan interest rates recently.
Joining the league of banks that have reduced their home loan interest rates to cash in on the festive season, private lender HDFC, on September 21, 2021, has decided to cut home loan rates to 6.70%. The reduction by HDFC amounts to a cut of five basis points from its earlier best rate of 6.75%.
The reduced home loan rates at HDFC come into effect from September 20, 2021, the lender said in a statement. To be valid till October 31, 2021, the new home loan interest rate at HDFC will be applicable to all new loan applications, irrespective of the loan amount or employment category. However, the lender will assess a borrower’s credit profile to offer them its best rate.
“Housing is much more affordable today than it ever was. In the last couple of years, property prices have more or less remained the same in major pockets across the country, while income levels have gone up. Record low-interest rates, subsidies under the PMAY, and tax benefits have also helped.” said Renu Sud Karnad, managing director, HDFC Ltd.
Among the other banks that have recently announced a cut in home loan rates are SBI, Kotak Mahindra Bank, Punjab National Bank, and Bank of Baroda. While the interest rate of HDFC and SBI are now at the same level, Kotak Mahindra is currently offering the best home loan interest rate at 6.55%. These banks are also offering a complete waiver on home loan processing fees, to attract borrowers at a time when there is a great deal of pent-up demand for residential real estate in the market.
Industry experts are of the view that that the reduction in home loan interest rates would be greatly beneficial for a sector that has been trying to spring out of a prolonged slowdown.
“There is already a growing desire of owning a home as consumers look at it as a necessity in this unprecedented time of the COVID-19 pandemic. With the onset of the festive season, there is stiff competition among financial institutions to provide the consumers with the best home loan interest rates,” said Ashok Mohanani, president, NAREDCO, Maharashtra.
“This is the best time to buy a home as it gives the aspiring home buyers a lifetime opportunity to purchase their dream home with various festive offers, as well as all-time low-interest rates. These factors are also proving to help spur the real estate demand that was temporarily hit last year, as a result of the pandemic,” he added.
HDFC cuts home loan interest rate to 6.75%
HDFC lowered its interest rates by five basis points, to 6.75%, effective from March 4, 2021
March 17, 2021: Private lender HDFC (Housing Development Finance Corporation) has lowered its interest rates for property buyers, by five basis points. The move by the lender is primarily prompted by housing finance companies losing their dominant grip on the home loan segment, amid banks offering generous cuts in their interest rates.
The housing finance company, which should not be confused with its subsidiary HDFC Bank, has now brought down its retail prime lending rate (RPLR) to 6.75% per annum. The new rate will apply, irrespective of the loan amount a borrower seeks. Typically, banks charge lower interest on home loans of up to Rs 30 lakhs and charge a higher amount of interest on higher loan amounts.
“HDFC reduces its RPLR on housing loans, on which its adjustable-rate home loans are benchmarked, by five basis points, with effect from March 4, 2021,” the lender said in a statement while adding that the benefit would also be extended to all existing customers. Before the rate cut, the housing finance company was charging between 6.8% and 7.3% interest on its home loans.
(A 100 basis point is equal to one percentage point.)
With the recent reduction of rates, HDFC has joined the league of lenders like State Bank of India (SBI) and Kotak Mahindra Bank, which are currently offering some of the lowest rates in the market. While SBI’s lowest home loan rate is currently at 6.7% per annum, Kotak is charging 6.65% annual interest on its home loans. Home loans at private lenders ICICI Bank are currently priced at 6.8%. Another market leader, Axis Bank has home loans at 6.6% per annum.
Apart from attempting to boost sales in the housing segment, the rate-cut spree by banks is also a move to get their business going, amid a dip in demand in other segments like personal loans, credit cards, etc., in the aftermath of the Coronavirus-induced economic slowdown.
According to rating agency Care Ratings, the home loan segment continues to be the fastest-growing credit segment in India, registering a moderate growth of up to 7.7% in January 2021. This is, however, much lower than the 17.5% growth that this segment registered a year ago before the pandemic-led slowdown hit the markets.
HDFC lowers lending rates by 10 bps to 8.25%
HDFC has announced a 0.10-percentage-point reduction in its floating rates, joining a growing list of lenders which are revising their loan prices downwards
October 15, 2019: Mortgage major HDFC, on October 14, 2019, announced a reduction in its floating interest rates by 0.1%, applicable for both, new as well as existing borrowers. This move brings down its lending rate to 8.25% for salaried borrowers to the lowest bracket and at 8.65% on the upper end. “HDFC has reduced its retail prime lending rate on housing loans, on which its adjustable rate home loans are benchmarked, by 0.10%, effective October 15, 2019,” a company spokesperson said. The interest rate will range from 8.25% to 8.65%, depending on the borrower.
The rate cut by the largest mortgage lender comes, following a cumulative 1.35% rate reduction by the Reserve Bank, since February 2019, to prop up the sagging economy amid a sustained period of low inflation. Many others have also reduced their lending rates in the recent past.
HDFC Bank reduces MCLR by 0.1% across all tenors
HDFC Bank has announced a cut in its lending rates by 0.1% across all tenors, bringing its one-year MCLR to 8.60%, with effect from August 7, 2019
August 7, 2019: Private sector lender HDFC Bank, on August 6, 2019, cut its lending rates by 0.1% across all tenors, effective August 7, 2019, sources said. The move comes a day ahead of the policy review by the Reserve Bank, which is reportedly peeved at lenders, for not passing on its three consecutive rate cuts of 0.75% to the borrowers.
With this, the new pricing of HDFC Bank’s one-year MCLR comes at 8.60%, the sources said, adding the new pricing is applicable from August 7. “MCLR has been cut across all tenors,” the source said. Starting with the overnight rate, the MCLR durations extend up to three years, with long duration products like home and auto loans linked to the one-year rate. For such products, banks have a mark-up over the one-year MCLR, depending on the risk perceptions, which becomes the final rate.
HDFC lowers lending rates by 10 bps for new and existing loans
HDFC has announced a reduction in its lending rate by 0.1%, with effect from August 1, 2019, across tenors and buckets of loans, for new, as well as existing borrowers
August 1, 2019: Mortgage major HDFC, on July 31, 2019, announced a reduction in retail loan pricing by 10 basis points, across tenors and buckets of loans, for new, as well as existing borrowers, effective August 1, 2019.
For home loans up to Rs 30 lakhs, the financier is offering 8.60% now. For women borrowers, the new rate is 8.55%, the largest mortgage lender said in a statement, adding that the rate reduction will be applicable to existing borrowers, as well.
For loans above Rs 30 lakhs and up to Rs 75 lakhs, the new rates will 8.85% and 8.80% for women borrowers and for those above Rs 75 lakhs, the prices will come down to 8.90% and 8.85%, respectively, it said.
The rate reductions come after the RBI lowered the policy rate by a cumulative 75 basis points to 5.75%, in three successive steps since February 2019 and prodded banks to pass on the benefits to end-customers, as they have lowered only 21 bps as of June 2019.
Source-https://housing.com/news/hdfc-home-loan-interest-rate/
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