Mumbai: The country’s largest private sector lender, ICICI Bank Ltd, on Thursday prepared to reintroduce a so-called teaser-rate home loan scheme that offers a mix of fixed and floating interest rates.
“ICICI Bank will offer home loans up to Rs30 lakh for a fixed interest rate of 8.25% in the first year; from the second year onwards (the) bank will charge 9%; and from the third year onwards the prevailing floating interest rate will be charged,’’ said a bank executive familiar with the development, who didn’t want to be named.
The scheme, however, will be offered only to existing ICICI Bank customers and will expire on 30 April.
ICICI Bank’s spokesperson was not available for comment.
The scheme is being reintroduced after leading mortgage lender Housing Development and Finance Corp. Ltd (HDFC) last week launched a similar home loan product at a fixed rate of 8.25% up to 31 March 2011 and 9% for the second year up to 31 March 2012. A floating rate charge would kick in for the balance period.
New offer: An ICICI Bank branch in Mumbai. The bank’s proposed loan scheme will have a mix of fixed and floating interest rates. Abhijit Bhatlekar/Mint
This was the housing finance company’s second dual-rate loan product; in December 2009, HDFC offered home loans at a fixed rate of 8.25% for two years as part of “its regular festive offer”. Subsequently, it would levy the applicable floating rate.
Private sector banks have reduced their home loans rates after State Bank of India decided to launch a revised version of its special home loan scheme up to 30 April.
Under its dual-rate scheme, interest rates on all home loans above Rs5 lakh would be 8% for the first year and 9% for the second and third years. From the fourth year on, the floating rate would be the benchmark prime lending rate (BPLR) minus 1.75%.
BPLR is the rate at which banks lend to their most creditworthy consumers.