HDFC reduces rates by 50 bps for Rs 30-50L slab

HDFC reduces rates by 50 bps for Rs 30-50L slab
Times of India, August 14, 2009, Page 23

TIMES NEWS NETWORK

Mumbai: Home loan major Housing Development Finance Corp (HDFC) has cut interest rates by 50 basis points (100 basis points = 1%) for the Rs 30 lakh-Rs 50 lakh slab. The new rate for this bracket will be 9% per annum, down from 9.5% earlier, a senior HDFC official said.

Earlier, HDFC had three slabs for home buyers. It charged 8.75% per annum for loans up to Rs 15 lakh, 9% for loans between Rs 15 lakh and Rs 30 lakh and 9.5% for loans of over Rs 30 lakh. Now the mortgage finance major has introduced a new slab of loans at 9% for Rs 15 lakh and Rs 50 lakh. After this rejig, only home buyers opting for loans of over Rs 50 lakh will pay an interest rate of 9.5%. Earlier even home buyers taking loan of above Rs 30 lakh were paying at the rate of 9.5%.

The change in loan brackets are on similar lines recently undertaken by a number of other leading home finance institutions like SBI and Axis Bank where the rejig was done without changing the prime lending rates (PLR). Earlier in mid-July, HDFC had cut interest rates on loans of up to Rs 15 lakh by 50 basis points to 8.75%. Of late, the mortgage lending market has seen a spate of cuts in lending rates, with different payment structures being introduced, including adjustable rate mortgages (ARMs) where the interest rate on repayments are varied periodically based on a number of market-driven factors.

The latest move from HDFC came following an SBI decision last week to cut home loan rates further. The country's largest bank said it was giving loans at 8% in the first year, and for the next two years the rates will be 8.5% to 9% depending on size of the loan.