ICICI Bank and HDFC on Monday cut interest rates on their home loans by 0.30 per cent, following in the footsteps of State Bank of India (SBI), which had recently reduced its interest rates on home loans. SBI had cut rates for affordable home loans by 0.25 per cent last week.
Home loans under Rs.30 lakh will fall under the affordable housing plan, with ICICI now charging an interest of 8.35 per cent for salaried women borrowers, with the rate being 8.40 per cent for other borrowers.
Similarly, HDFC will also charge an interest of 8.35 per cent for female borrowers, with other borrowers paying 8.40 per cent for loans under Rs.30 lakh.
|Category (loans up to Rs.30 lakh)||HDFC||ICICI|
|Salaried female borrowers||8.35%||8.35%|
|Other salaried borrowers||8.40%||8.40%|
|Self-employed female borrowers||8.50%||8.50%|
|Other self-employed borrowers||8.55%||8.55%|
The reduction in interest rates comes as a boost to the government’s Housing for All scheme, under which it aims to have an India where each family owns a house by 2022. Under the initiative, borrowers will be eligible for a 4 per cent subsidy on loans under Rs.9 lakh, and a 3 per cent subsidy if the loan amount is up to Rs.12 lakh.
ICICI Bank is also offering borrowers the option of linking their loans to either the 6-months or 1-year MCLR, choosing between floating and fixed interest rates.
Both ICICI and HDFC previously charged female borrowers 8.65 per cent for loans under Rs.30 lakh.
This reduction in rates brings them on par with SBI, ensuring that borrowers get the best of this move.
Demonetisation had resulted in banks being flooded with deposits, giving them the opportunity to reduce their lending rates. Other banks could follow suit to keep pace with these leading names in the home loan industry.
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