HDFC may extend new home loan offer

HDFC may extend new home loan offer
Business Standard, December 03, 2009, Section II, Page 2

Newswire18 / New Delhi December

Mortgage major Housing Development Finance Corp (HDFC) might extend its new home loan scheme beyond January, if cost of funds remained stable, a senior company official said today.

The company on Tuesday launched a new scheme, under which borrowers will pay a fixed interest rate of 8.25 per cent till March 2012 and then move to a floating rate structure.

This offer rate is applicable to all new home loan customers who apply before January 31 and take at least part-disbursement before March 31.

“As of now, the scheme is available till January-end, but if the cost of funds is at current levels, we may look to extend the scheme. If Reserve Bank of India hikes its key policy rates, as is widely expected, then an extension is unlikely as the cost of funds will move up,” the official said.

HDFC has launched this scheme in response to State Bank of India’s popular 8 per cent home loan offer earlier this year.

Under the SBI plan, a borrower pays a fixed rate of 8 per cent for the first year, and 8.5 per cent for second and third years. From the fourth year, the borrower can opt between fixed and floating rates.