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Do not let higher interest rates bog you down from buying the dream house you may have always wanted. Builders are coming to the rescue. Sources say that several builders in the past one month have been approaching banks to offer lower interest rates to new home loan borrowers. The rack rate for a Rs10 lakh 5 year-10 year floating rate home loan is anywhere between 9.5 per cent to 10.5 per cent, but banks like ICICI had tied up with builders and offered a fixed rate of 7.99 per cent for the first three years. So how does it work for ICICI? The builder pays the bank the difference between 8 per cent and 10.5 per cent rate upfront in cash. With the ICICI Bank scheme having ended in August, builders have now approached State Bank of India, which is also a big player in home loans, but the SBI management hasn't yet agreed to these offers from builders as it is not sure whether it would be able to accept money from builders in cash, in lieu of the borrower. They fear parliamentary questions. But builders aren't daunted. They are approaching other banks like IDBI, HDFC and Kotak Mahindra for this particular scheme, which is popularly called subvention. Some builders who are interested in offering such schemes are Nirmal Builders, Royal Palms, Ekta Housing, Evershine Builders among several others.
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