Mumbai: India’s biggest mortgage lender HDFC Ltd on Tuesday announced a festive offer in line with State Bank of India, offering home loans at 6.70 per cent, regardless of the loan amount for customers with a credit score of 800 and above. Last week, SBI offered a similar credit score linked home loan rate of 6.70 per cent. This was followed by rate cuts from Punjab National Bank and Bank of Baroda.
With corporate credit growth subdued, lenders are competing to increase their share in the high margin home loan market. Besides, competition, the ample liquidity in the banking system has brought down home loan interest rates to a historic 15-year low. Real estate developers expect the lower rates to boost housing sales this festive season, as homebuyers prefer to buy properties during the auspicious period, including Navratri, Durga Puja, Dussehra and Diwali.
HDFC's festival offer is applicable to all new loan applications irrespective of the loan amount or employment category and can be availed of between September 20 and October 31.
"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," HDFC Ltd said.
"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. Record low interest rates, subsidies under PMAY and the tax benefits have also helped," said Renu Sud Karnad, managing director, HDFC Ltd.
Real estate experts feel that these interest rate cuts could be a major factor in boosting the home sales this time. Bhushan Nemlekar, director, Sumit Woods Limited, a Mumbai-based realtor, said "The real estate sector has benefited immensely from the record low home loan rates. Currently, the all-time low, sub-7 per cent interest rates are encouraging consumers to proceed with their purchase and quickly close their transactions. Low interest rates also help enhance eligibility for home buyers, thereby bringing more customers into the marketplace."
Cherag Ramakrishnan, MD, CR Realty said, "The real estate market has seen decent sales this year and this reduction in interest rates would further help to keep up the sales momentum."
Pritam Chivukula, secretary of Credai-MCHI, said, "The benign interest rates environment will continue for some time and it is unlikely that interest rates will fall further. 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, National Real Estate Development Council said, "This is the best time to buy a home."
Jayesh Rathod, ED, The Guardians Real Estate Advisory, said, "We have been maintaining since long that banks need to pass on the benefits of the reduced repo rates to consumers and we are happy to see the same happen....