HDFC cuts home loan rates by 0.25% till July 15

HDFC has cut down his rates on variable home loans by 25 basis points till July 15^, 2007 for new borrowers. The country’s largest housing finance provider said the rate cut was a part of a monsoon promotional offer.

“As part of the monsoon offer, a customer applying for home loan up to Rs 50 lakh between June 18 and July 15 will be offered a variable interest rate of 11% per annum instead of 11.25%,” an official was quoted in Economic Times. In addition, the reduced applicable fees during the promotion will be 0.25% instead of 0.50% of the loan applied for, subject to a maximum of Rs 5,000. However, the customer has to avail of disbursement before July 31.

A 25-basis-point reduction in the lending rate would bring down the equated monthly instalment on a Rs 10-lakh loan by Rs 160. HDFC rates are slightly below rates offered by its rival ICICI Bank. With this reduction, some categories of loans from HDFC are cheaper than ICICI Bank loans by one percentage point. There will, however, be no reduction in the fixed-rate loans offered by HDFC.

Also, there is no change in rates for old customers. The rates have been lowered for new customers by revising the spread over the bank’s prime lending rate, with benchmark PLR itself remaining unchanged.

Real estate agents say there is a slowdown in purchases during the monsoon. As a result, there are several schemes by developers to entice buyers during the period. HDFC and other housing finance providers have introduced such limited period schemes. However, there are instances when schemes have been extended following an overall softening in interest rates.

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