HDFC slashes home loan rates for limited period

Mumbai, Jan 17, 2009: The Housing loan major HDFC has slashed its interest rates for the second time in a month. According to HDFC statement, all loans up to Rs 30 lakh will be available at 9.75 per cent. Up until now, the company was charging 10.25 per cent for all loans below Rs 20 lakh and 11.25 per cent above Rs 20 lakh.

HDFC has also cuts its rates above Rs 30 lakh to 10.75 per cent from 11.25 per cent earlier. However these new rates are applicable only to new loaners. Existing borrowers do not stand to benefit.

When HDFC cut its rate the last time in December 2008 it had reduced home loan rates both for new and existing borrowers by 50 bps. The reduction in home loans rates comes at a time when housing loan companies are facing stiff competition from public sector banks.

The state-owned banks are offering special rates on all home loans up to Rs 20 lakh. By targeting this sub-Rs 30 lakh and above-Rs 30 lakh category, HDFC is clearly trying to cater to a larger share of borrowers. However, HDFC said these new rates will be effective from today but it is only for a limited period.