HDFC reduces its lending rate for loans up to Rs30 lakh

17 January 2009

Housing Development and Finance Corporation (HDFC), the country's largest housing sector lender, yesterday slashed its home loan rates by 50 basis points i.e. half a per cent.

With this cut all new floating rate loans upto Rs30 lakhs are available at 9.75 per cent the same level as they were in 2006. Also loans above Rs30 lakh will be at 10.75 per cent

Terming the reduction a special offer, HDFC officials said that such offers were typical of the financial year-end deals.

The biggest gainers this are those seeking to avail of loans between Rs 20 to Rs 30 lakh. After the first stimulus package the PS banks reduced the rates of all new home loans to 9.75 per cent for loans between Rs5 lakhs and Rs20 lakhs.

At present, State Bank of India (SBI), the country's largest bank, offers home loans above Rs20 lakh at 10.25 per cent and ICICI Bank at 12.50 per cent. Public sector banks currently offer home loans up to Rs5 lakh at 8.5 per cent and loans between Rs5 lakh and Rs20 lakh at 9.25 per cent.

Reduced cost of funds
HDFC has cited reduced cost of funds as a reason for bringing down the rates to this level. The housing development company has cut its deposits rate by.50 per cent to 0.75 per cent from 15 January, 2009.