HDFC, the country's biggest mortgage lender, on Tuesday announced a festive offer in line with peers like SBI with home loans starting from 6.70 per cent.
Last week, SBI as part of festival bonanza offered a concessional home loan rate of 6.70 per cent under its festive offer. This was followed by other lenders like Punjab National Bank and Bank of Baroda.
"Housing is much more affordable today than it ever was. 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," said Renu Sud Karnad, managing director, HDFC Ltd.
Record low interest rates, subsidies under PMAY and the tax benefits have also helped, she said.
Under the festive scheme, HDFC said, "Customers can avail HDFC Home Loan starting at 6.70 per cent per annum effective September 20, 2021. This offer will be applicable to all new loan applications irrespective of the loan amount or employment category," HDFC said in a statement.
The special festive offer at 6.70 per cent is for all loan slabs and for all customers with credit score of 800 and above.
Before this special offer, the rate for salaried customers for loan above Rs 75 lakh and credit score of 800 and above was 7.15 per cent and for self employed was 7.30 per cent.
Hence, effective cut for these customers could be up to 45 bps for salaried and up to 60 bps for self employed.
The special rate is linked to borrower's credit score, it said, adding that this is a close ended scheme and will be valid till October 31.
Kotak Mahindra Bank has reduced its home loan interest rates by 15 basis points (bps) from 6.65 percent to 6.50 percent p.a. This special rate of 6.50 percent p.a. is a limited period festive season offer beginning September 10 and ending November 8, 2021.
Bank of Baroda (BoB) is offering a waiver of @0.25 percent in the existing applicable rates for home and car loans. In addition to that, the bank is also offering a waiver of processing fees in home loans. Now, home loan rates will start at 6.75 percent and car loan rates start at 7.00 percent.
Punjab National Bank (PNB) too has slashed the repo-based lending rate by 25 basis points (bps) to 6.55 percent.
Interest rate cuts to boost home sales during festive season
Real estate experts feel that these interest rate cuts could be a major factor in boosting the home sales this festive season.
Pritam Chivukula - Co-Founder & Director, Tridhaatu Realty and Hon. Secretary, CREDAI-MCHI said, "The reduction in home loan interest rates by leading banks for a limited period have extended the best buying opportunity for the homebuyers. The banks are competing to grab the home loan customers before the fiscal year ends.
"Currently, the home loan rates are at an historic 15 year low, as banks compete in a market with low credit demand. The benign interest rates environment will continue for some time and it is unlikely that interest rates will fall further from the current levels. For the next few days, the buyers can swoop in on good deals on the back of rock-bottom interest rates on home loans along with festive offers from good developers on the eve of expected price rise. We can already see that the demand for residential properties has picked up now as people are beginning to believe that this is the best time to buy a property."
Ashok Mohanani - President, NAREDCO Maharashtra said, "There is already a growing desire of owning a home as consumers look at it as a necessity in this unprecedented time of the COVID-19 pandemic. With the onset of the festive season, there is a stiff competition amongst the financial institutions to provide the consumers with the best home loan interest rates. This is the best time to buy a home as it gives the aspiring homebuyers a lifetime opportunity to purchase their dream home with various festive offers as well as all-time low interest rates. These factors are also proving to help spur the real estate demand that was temporarily hit last year as a result of the pandemic."
(With PTI inputs)