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Business News/ Industry / Banking/  ICICI Bank slashes home loan rates to 6.7%, lowest in a decade
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ICICI Bank slashes home loan rates to 6.7%, lowest in a decade

The new interest rate, the bank said, will be applicable from Friday to 31 March. For loans above ₹75 lakh, interest rates begin at 6.75%

For home loans above ₹75 lakh, ICICI Bank will apply interest rates beginning at 6.75% (Mint)Premium
For home loans above 75 lakh, ICICI Bank will apply interest rates beginning at 6.75% (Mint)

ICICI Bank Ltd on Friday said it has lowered its interest rate on home loans of up to 75 lakh to 6.7%, its lowest in 10 years.

The new interest rate, the bank said, will be applicable from Friday to 31 March. For loans above 75 lakh, interest rates begin at 6.75%.

Also Read | India’s vaccine rollout changes gears

ICICI Bank’s move comes days after rival lenders such as State Bank of India (SBI), Kotak Mahindra Bank and Housing Development Finance Corp. (HDFC) cut their home loan rates.

Ravi Narayanan, head (secured assets) at ICICI Bank, said in a statement that the bank is seeing a resurgence in demand from consumers, who want to buy homes for their own consumption, in the past few months.

“We believe that this is an opportune time for an individual to buy his/her dream home, considering the prevailing low interest rates," said Narayanan.

Flush with liquidity and in tandem with Reserve Bank of India’s (RBI’s) repo rate cuts since March last year, banks have been lowering their lending rates. Home loan rates at present are at a 15-year low, experts have pointed out. However, lenders are still being picky and pricing loans differently, depending on the risk profile and creditworthiness of borrowers. For SBI and Kotak Mahindra Bank, the rate of 6.7% and 6.65%, respectively, are available only to borrowers with a credit score of 800 and above. Typically, credit bureau scores are used to judge the creditworthiness of borrowers and are essential for getting loans, with some lenders offering lower interest rates to customers with higher scores.

In November, ICICI Bank announced it crossed the 2-trillion mark in mortgage loans.

Lenders have traditionally preferred secured assets over unsecured ones, and home loans are one of the most sought-after businesses. With an immovable asset like a house as collateral, banks and non-banks have been quite bullish on mortgages. Bankers said that as the pandemic wanes, there has been a renewed demand for buying homes, leading to higher sanctions and disbursals of home loans.

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ABOUT THE AUTHOR
Shayan Ghosh
Shayan Ghosh is a national editor at Mint reporting on traditional banks and shadow banks. He has over 12 years of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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Published: 05 Mar 2021, 12:21 PM IST
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