MUMBAI (CU)_Ahead of the festive season in India, private and public sector lenders in the South Asian nation have been taking advantage of the record low interest rates to launch a flurry of rate cutting for home loans. Earlier this month, the State Bank of India (SBI), the Kotak Mahindra Bank, Punjab National Bank and the Bank of Baroda announced waivers and special schemes, as economic activities pick up the pace after a pandemic-induced slowdown in the first half of this year.
Accordingly, the Housing Development Finance Corporation (HDFC) became the latest lender to join the rate cutting tide, deciding to reduce its home loan rates for new customers amid hopes for an acceleration in property purchases. From 20 September, customers with a credit score of 800 and above can enjoy a home loan rate of 6.7 per cent, a decline from the company’s previous rate of 6.75 per cent. The offer would be valid only until 31 October, the mortgage-lending pioneer noted.
“In the last couple of years, property prices have more or less remained the same in major pockets across the country while income levels have gone up,” Renu Sud Karnad, the managing director of HDFC said, adding that record low interest rates, tax benefits and subsidies under PMAY and have also contributed to the decline in rates.
Meanwhile, Kotak Mahindra Bank has also launched an interest rate of 6.5 per cent for home loans, a 15 basis points (bps) decrease from the bank’s previous rate. The offer, which is valid from 10 September to 8 November, is linked to the borrower’s credit profile, like HDFC. SBI and Bank of Baroda are also offering reduces rates on home loans, at 6.7 and 6.75 per cent, respectively, while borrowers taking a mortgage from the latter can also enjoy a waiver of processing fees during the festive season.