Mumbai: India’s premier mortgage firm, Housing Development Finance Corp. Ltd (HDFC), on Thursday cut the benchmark rate for its home loans, known as retail prime lending rate, by 25 basis points to 13.75%.
The last time HDFC announced a rate cut was in July 2003. Since then, it had raised its benchmark rate from 9.75% to 14% through 10 hikes.
Following the cut, the home loan rate for all existing HDFC floating rate customers will go down from 10.25% to 10%. HDFC disburses its floating rate loan at 375 basis points lower than the benchmark rate. The rate cut takes effect from 1 February.
However, it is not known whether HDFC will change the spread between the benchmark rate and the actual home loan rate for new customers.
HDFC has a customer base of about 900,000 and 90% of them are floating rate customers.