NEW DELHI: Joining the likes of State Bank of India and Kotak Mahindra Bank, mortgage major Housing Development Finance Corporation (HDFC) has cut its interest rate offering on Wednesday, making credit cheaper 0.05 per cent.
“HDFC reduces its retail prime lending rate (RPLR) on housing loans, on which its adjustable-rate home loans (ARHL) are benchmarked, by 0.05 per cent, with effect from March 4,” an official statement stated. The change will benefit all existing HDFC retail home loan customers, it added.
For the existing customers, the interest rates will get repriced 0.05 per cent automatically on the existing interest rates.
However, they will have to approach the lender if they wish to go as low as 6.75 per cent, which will require payment of a fee.
However, unlike HDFC, SBI and Kotak’s reduced home loan rates are available for a limited period. One of SBI’s biggest competitors in the segment is HDFC.
Motilal Oswal expects HDFC’s market share to grow to 47-50 per cent in the first half of 2021, from 45 per cent.
Overall, the share of banks and non-banks in home loan disbursement has grown from 65-35 per cent, respectively, in FY20 to 75-25 per cent in FY21 so far.
This is also because DHFL, the third largest HFC, went into bankruptcy in December 2019.