Home loan rates in India have fallen to levels below 6.75 per cent with banks, flush with funds, reduced lending rates to lowest levels in nearly 15 years to beat the slump.
Private lender ICICI Bank is the latest to cut rates, after Kotak Mahindra Bank, State Bank of India, HDFC Bank and ICICI Bank reduced lending rates for home buyers.
ICICI Bank said the new rate of 6.70 per cent will be applicable to loans up to Rs75 lakh and will be open to all - new and existing customers. It also extended the facility of digital submission of loan applications.
The bank said that home loans above Rs75 lakh will attract a rate of 6.75 per cent.
These revised rates will be available till 31 March 2021, the bank said.
Announcing the cut, ICICI Bank said that home buyers, including those who are not its customers, can apply for home loan digitally through the bank’s website and mobile banking platform iMobile Pay.
While SBI, HDFC Bank and ICICI Bank pegged the new housing loan rate at 6.70 per cent, Kotak Mahindra cut home loan rates to 6.65 per cent.
Ravi Narayanan, Head of Secured Assets at ICICI Bank said “We see resurgence in demand from consumers, who want to buy homes for their own consumption, in the past few months. We believe that this is an opportune time for an individual to buy their dream home, considering the prevailing low interest rates."
If demand from corporates remains week in the quarters ahead, lenders might be compelled to under-cut each other in order to grow market share.
Banks have seen a spike in home loans in the absence of other business loans in the pandemic-hit exconomy. In November 2020, ICICI Bank became the first private sector bank in the country to cross the Rs2 lakh crore-mark in mortgage loan portfolio. Its mortgage disbursements increased in Q3-2021 and reached an all-time monthly high in December 2020, the bank said while announcing its third-quarter results.