Friday, March 5, 2010

ICICI, HDFC Bank discontinue special home loan scheme

"Rate revisions occur due to changing market conditions. The hikes are in light of the current macroeconomic, monetary, and anticipated liquidity conditions"

Home loan rates are set to get expensive for new borrowers:

ICICI Bank and HDFC have discontinued their special home loan scheme. India's largest private sector bank will discontinue its 8.25% home loan scheme from March 1. The normal rates for ICICI Bank’s home loans up to Rs 30 lakh are 8.75 per cent, loans between Rs 30-50 lakh at 9 per cent and those above Rs 50 lakh, at 9.50 per cent.

HDFC too has discontinued its 8.25% home loan offer.

Similarly, Kotak Mahindra Bank has hiked interest rates on home loans by 50 bps.

Bank of India told NewsWire18 that it has no plans to extend the special home loan scheme, which lapsed on February-end. The bank is also not looking to hike retail loan rates as of now. To read more, please, visit CNBC-TV18

Many other banks, including Union Bank, Axis Bank and Punjab National Bank have already discontinued their special home loan schemes.

However, public sector banks are unlikely to increase the retail loan rates in a hurry. State Bank of India chairman OP Bhatt recently hinted that lending rates may go up only from the first quarter of the next fiscal. SBI is likely to take a call on hiking the lending rates by March-end.

However, teaser rates on home loans will come to an end by March end. Indicating the central bank’s discomfort with such teaser offers, especially when bad loans in the domestic banking system are on a rise, RBI deputy governor Usha Thorat had last month said, “some ‘teaser rates’ by banks is a cause of concern.” In a bid to woo customers, banks like SBI, Axis Bank and ICICI Bank have offered a special or a fixed rate on their home loans in the first two years, following which the rate would be charged on the floating rate basis. To read more, please, visit Indian Express

Private banks have hiked auto loan rates too.

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2 comments:

  1. Home loan with some minor variations is appropriate to both Indians in their local nation and even those who are resolved overseas. No question, getting a mortgage mortgage is the most sought-after mortgage these days and one it is accepted then people desperately look ahead to obtaining a house in a preferred place.

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  2. An insight on the big banks discontinuing on their special home loan schemes due to rate revision. A must read for the people.

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