Mumbai: Urban housing mortgage major HDFC made an official announcement stating that it will cut its lending rates by the end of the week, since its rates are among the highest, after competitors cut interest rates. "In three days, you will hear an announcement from our side once the Asset-Liability Management (ALM) committee meets. Now, we have some sense of how funding costs have come down," said HDFC Vice Chairman and Chief Executive Keki Mistry.
He said that HDFC, the largest non-bank mortgage player reviews interest rates on a regular basis and a cut will be announced "certainly", before the end of this week. However, he did not quantify the extent of the rate cut, saying that it is for the Asset-Liability Management committee to decide. He said that there has been a reduction of up to 0.20 per cent in yields on the benchmark 10-year government securities as well. Its rival State Bank of India had announced an aggressive 0.40 per cent cut in its base rate after the RBI's surprise 0.50 per cent repurchase rate cut last week, setting-off a series of rate cut announcements.
Later, it transpired that SBI hiked its spreads on home loans by 0.20 per cent in order to protect its margins. SBI's standard offering to non-female applicants currently stands at 9.55 per cent, while HDFC offers the same at 9.90 per cent at present. Mistry made it clear that HDFC will maintain spreads at the 2.2 per cent to 2.35 per cent level which it has historically maintained.
