Mumbai: India’s largest mortgage lender Housing and Development Finance Corp. Ltd (HDFC) on Tuesday lowered its retail prime lending rate (RPLR) by half a percentage point to 14%.
This will affect all its home loans taken on floating interest rates. Benefits from the rate cut will be passed to existing floating rate customers in the next three months, based on reset dates, HDFC said in a statement.
HDFC’s floating interest rate on loans up to Rs30 lakh now stands at 9.5%. For loans of more than Rs30 lakh, the interest rate is pegged at 10.5%. The interest rate on fixed rate loans stands at 14.25%.
Benefiting customers: HDFC joint MD Renu Sud Karnad. Ramesh Pathania / Mint
The rate cut comes after State Bank of India and ICICI Bank Ltd, the country’s two largest lenders by assets, revised interest rates earlier in March. They, however, did not reduce their RPLRs that would have benefited existing floating rate customers.
ICICI Bank cut rates on floating interest home loans for new customers by 25-50 basis points. One basis point is one-hundredth of a percentage point.
Interest rates on ICICI Bank’s home loans of up to Rs20 lakh were trimmed to 9.75% from 10%. The bank charges an interest rate of 10% on home loans in the range of Rs20-30 lakh, while loans exceeding Rs30 lakh attract an interest rate of 11.5%.
SBI has reduced its home loan rate to 8% for one year for new customers.
Renu Sud Karnad, joint managing director (MD) of HDFC, said: “Marginal cost of borrowing had come down earlier this year and the same was passed on to our new customers through our special limited period offer (rates beginning at 9.5%). We are now seeing a reduction in the costs on a portfolio level.”
This is the second time in three months that HDFC has reduced its RPLR. With this reduction, it has lowered it by one percentage point.