ICICI snips home loan rates 0.5%
MUMBAI: ICICI Bank recently reduced interest rates on home loans by 50 basis points. The institution has seen a dip in its home loan disbursements following its decision to raise interest rates above what was being offered in the market.
A spokesperson for the bank said the bank had decided to reduce rates following a decision by the central bank to grant priority sector status to home loans up to Rs 20 lakh. Most of ICICI Bank’s home loans are below Rs 20 lakh and a growth in home loans would allow the bank meet its priority sector obligations.
He added the bank was passing on the benefits of the regulatory relaxation to borrwers. Officials said the reductions applied to all loans below Rs 20 lakh. ICICI Bank’s lendable resources have gone up sharply with the bank raising close to Rs 17,500 crore through an equity issue. Besides providing it with lendable resources, the equity issue also increases the lending headroom for the bank by raising its net worth.
Prior to the reduction, the bank offered floating rate loans at 12% and fixed rate loans at 14%. Now, loans will be available to floating rate customers at 11.5%. Despite the reduction, ICICI Bank’s home loans continue to be more expensive than those offered by HDFC. The country’s largest housing financce company is offering floating rate loans at 11% as part of a monsoon scheme.
A customer applying for a home loan up to Rs 50 lakh between June 18 and July 15 will be offered a variable interest rate of 11% per annum instead of 11.25%. In addition, the reduced applicable fees during the promotion will be 0.25% instead of 0.50% of the loan applied for, subject to a maximum of Rs 5,000. However, the customer has to avail of disbursement before July 31.
Last week, HDFC chairman said he expected interest rates to be steady in the coming months as he believes interest rates have peaked. HDFC chairman also pointed out that real estate prices were coming down in places with excessive construction activity.
Via : economictimes.indiatimes.com
A spokesperson for the bank said the bank had decided to reduce rates following a decision by the central bank to grant priority sector status to home loans up to Rs 20 lakh. Most of ICICI Bank’s home loans are below Rs 20 lakh and a growth in home loans would allow the bank meet its priority sector obligations.
He added the bank was passing on the benefits of the regulatory relaxation to borrwers. Officials said the reductions applied to all loans below Rs 20 lakh. ICICI Bank’s lendable resources have gone up sharply with the bank raising close to Rs 17,500 crore through an equity issue. Besides providing it with lendable resources, the equity issue also increases the lending headroom for the bank by raising its net worth.
Prior to the reduction, the bank offered floating rate loans at 12% and fixed rate loans at 14%. Now, loans will be available to floating rate customers at 11.5%. Despite the reduction, ICICI Bank’s home loans continue to be more expensive than those offered by HDFC. The country’s largest housing financce company is offering floating rate loans at 11% as part of a monsoon scheme.
A customer applying for a home loan up to Rs 50 lakh between June 18 and July 15 will be offered a variable interest rate of 11% per annum instead of 11.25%. In addition, the reduced applicable fees during the promotion will be 0.25% instead of 0.50% of the loan applied for, subject to a maximum of Rs 5,000. However, the customer has to avail of disbursement before July 31.
Last week, HDFC chairman said he expected interest rates to be steady in the coming months as he believes interest rates have peaked. HDFC chairman also pointed out that real estate prices were coming down in places with excessive construction activity.
Via : economictimes.indiatimes.com
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