Rates across the banking system have headed south in the last few months, as the Reserve Bank of India (RBI) and the government work in tandem to propel the slowing economy. New rates will now range between 7.65-7.95 per cent for existing salaried home loan customers.
MUMBAI: Housing Development Finance Corp Ltd (HDFC), India’s largest private sector mortgage financier has reduced its benchmark lending rate by 20 basis points with immediate effect. One basis point is 0.01 percentage point.
Borrowers will save Rs 325 per month on installements on a Rs 25 lakh loan with a 20 year tenure and Rs 300 per month for a 15 year tenure after the latest reduction.
This is HDFC’s third reduction in its so called retail prime lending rate (RPLR) since March. It will lead to a reduction interest payments for all borrowers of the company.
The company’s RPLR now stands at 16.20% after the latest cut. The total reduction in RPLR since March is at 40 basis points. RPLR is the benchmark rate but HDFC lends much below this late.
“The rate cut reflects our lower cost of funds which have been passed on to customers. Easy liquidty has also made funds cheaper,” said Keki Mistry, vice chairman, HDFC.
HDFC’s cut follows similar rate cuts by banks following the Reserve Bank of India’s reduction in lending rates since March. State Bank of India had earlier this month reduced its benchmark lending rate by 25 basis points.
