LIC cuts home loan rate by 0.75 per cent for existing customers

Leading mortgage financier LIC Housing Finance has further reduced its lending rates by 0.75 per cent for all existing customers effective 1 April.

The reduction would bring home loan rates for borrowers to 10-10.50 per cent as against 10.75-11.25 per cent earlier, LIC Housing Finance director and chief executive R R Nair said.

He said the reduction in interest rates has been consequent upon a reduction in the company's cost of funds.

''The interest rates for existing customers would be reduced by 75 basis points on EMIs falling due on 1 April 2009, payable on 1 May 2009,'' the lender said in a release, adding, ''The reduced rates will be the lowest in almost two years.''

This interest rate reduction is the second one by the company in the past three months. LIC Housing Finance had earlier reduced its home loan rates by 75 basis points on EMIs due from 1 January 2009.

In January, the company had reduced its lending rates by 0.75 per cent for the existing customers.

"We have reduced our interest rates by 1.5 per cent since January this year. We are now offering rates that are lowest in two years," Nair said.

LICHFL, a subsidiary of India's largest insurer Life Insurance Corporation of India, had cut its lending rates by 1.25 per cent in three tranches during last year.