Housing Development Finance Corp, India’s mortgage-lending pioneer, has joined banks in reducing its home loan rates for new customers, tapping into festive-season optimism for property purchases that can help grease the wheels of several sectors of the economy.
Customers can avail home loans at 6.70% effective September 20, down from the minimum 6.75% rate offered by the company currently. However, this special rate is only offered for individuals with a credit score of 800 and above. It will be valid until October 31.
Lenders are hoping to take maximum advantage of the record low interest rates and the impending festive season, which is expected to be better than last year due to improving economic activity.
HDFC follows similar cuts by both private and public sector lenders. Earlier this month, State Bank of India, Bank of Baroda, Kotak Mahindra Bank and Punjab National Bank introduced special schemes or waivers ahead of the festive season.
Kotak reduced its home loan interest rates by 15 basis points (bps) from 6.65% to 6.50% effective September10 and ending on November 8. One basis point is 0.01%.
Like HDFC’s, Kotak’s offer on new home loans is linked to the borrowers’ credit profiles.
SBI also reduced its minimum home loan rate to 6.7% based on the borrowers’ credit scores, irrespective of the loan amount.
Bank of Baroda is also offering a 25 basis point discount on home and car loans together with a waiver of processing fees in home loans. The bank is now offering new home loans starting at 6.75%, while car loans start at 7%.
PNB has also waived processing and service charges on retail loans.