Housing finance companies offer cheaper home loans to loan seekers

Most banks and housing finance companies (HFCs) are offering reduced or 'discounted interest rates' on home loans to new loan seekers.

While the offer of 'discounted rates' to new customers means that they pay 10.5% p.a; the interest rates existing customers which was as low as 8.5% has increased to 11.5%.

While the existing loan consumers have been the worst affected by this rate cut, it has also had an impact on banks lending businesses. However, banking industry analysts are of the opinion that demand for housing loans will pick up after the initial dip during the first few months of the current financial year. Banks and HFCs have said that the home loan segment has actually shown a growth of about 10%.