New Delhi: Following State Bank of India (SBI), two leading private lenders ICICI Bank and HDFC Ltd on Monday slashed interest rate by up to 0.3 per cent for loans of up to Rs30 lakh (Rs3 million) to promote affordable housing.
New home loans rates for up to 30 lakh (3 million) for women will be 8.35 per cent and for other others, 8.40 per cent, mortgage lender HDFC Ltd said in a statement.
For home loans between Rs30 lakh (Rs3 million) and Rs75 lakh (Rs7.5 million) the interest remains unchanged at 8.50 per cent for all borrowers. For home loans above Rs75 lakh (Rs7.5 million) it is now 8.55 per cent, from 8.75 per cent for all, it said.
The new rates are effective from on Monday and are expected to be followed other lenders as well.
Earlier in the day, the country's largest private sector lender, ICICI Bank too reduced interest rates by up to 0.3 per cent for home loans up to Rs30 lakh (Rs3 million) in its bid to boost affordable housing.
With this reduction, salaried borrowers can avail home loans at among the lowest rates in the industry, the country's largest private sector lender said.
Salaried women borrowers will get home loans at 8.35 per cent and others at 8.40 per cent, it said.
Last week, State Bank of India had reduced its affordable home loan rates by up to 25 basis points, offering a lower rate of 8.35 per cent to new women borrowers.
With around 26 per cent market share, SBI is also the biggest player in the home loan segment.
This move would be followed up by other lenders both in private and public sector space to stay in the competition.
With paring of rate, ICICI Bank said its customers taking home loans in the affordable segment will also have the option to select the type of interest rate.
In both these cases, the reduction in interest rates is 30 basis points from the previous rates.
They can enjoy the benefit of floating interest rate or a fixed interest rate for the initial two/three years followed by floating rate.
"Further, borrowers can also choose to link their home loans with Marginal Cost of funds based Lending rate MCLR-6 Months or I-MCLR-1 Year. The bank is the first to offer such flexibility to customers. The reduced rate will be effective from May 15, 2017 for new borrowers," it said.
ICICI Bank MD Chanda Kochhar said the bank is committed to supporting the government's vision to provide housing for all by 2022.
"In line with this commitment, we have reduced the home loan interest rates for the affordable housing segment. With this announcement, customers of Economically Weaker Section (EWS) and Low Income Group (LIG) can avail the dual benefit of low interest rates from us and the Credit Linked Subsidy under the Pradhan Mantri Awas Yojana," she said.
This initiative, along with the bank's expansion of home loan business in tier II cities, will empower a larger section of customers to realise the dream of owning a new home, she added.