Taking a cue from market leader State Bank of India, ICICI Bank Ltd and mortgage market leader Housing Development and Finance Corp Ltd. (HDFC) have brought down lending rates for small-ticket home loans.
ICICI Bank has cut its lending rate for home loans up to Rs 30 lakh by 30 basis points to 8.35 percent for salaried women borrowers and to 8.40 percent for other salaried borrowers effective Monday, it said in a release.
HDFC has reduced its rate on home loans up to Rs 30 lakh to 8.35 percent for women salaried borrowers and 8.40 percent for others. For loans between Rs 30 lakh and Rs 75 lakh, the rate now stands at 8.50 percent, and for those above Rs 75 lakh, it is 8.55 percent, the non-banking finance company said in a statement.
HDFC’s rate prior to the latest reduction stood at 8.65-8.70 percent for loans up to Rs 75 lakh, and 8.70-8.75 percent for those above.
The reduction by the two comes exactly a week after State Bank of India reduced its lending rates on home loans up to Rs 30 lakh by 25 basis points to 8.35 percent.
ICICI Bank is committed to support the Government’s vision to provide housing for all by 2022. In line with this commitment, we have reduced the home loan interest rates for the affordable housing segment.Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank
ICICI Bank has also introduced a provision where a borrower can opt for a fixed rate of interest for the first two to three years of the repayment period, following which, they will pay the floating rate pegged to the prevailing marginal cost of funds lending rate.
SBI introduced a similar option on loans up to Rs 30 lakh in January this year.
At a time when loan growth in the corporate sector is sluggish, more and more banks are looking to bolster their credit growth by targeting retail customers. Within the retail segment, one of the fastest growing segments continues to be home loans.