ICICI Bank has reduced home loan interest rate to 6.7 percent, the private sector lender said on March 5. The revised interest rate—the lowest in 10 years by the bank—will be effective from March 5, 2021.
Customers can avail of this interest rate for home loans of up to Rs 75 lakh. For loans above Rs 75 lakh, interest rates are pegged at 6.75 percent on. These revised rates will be available till March31, 2021, the bank said.
“We see a resurgence in demand from consumers, who want to buy homes for their own consumption, in the past few months. We believe that this is an opportune time for an individual to buy his/her dream home, considering the prevailing low interest rates,” said Ravi Narayanan, Head- Secured Assets, ICICI Bank.
Last week, a clutch of banks, including country’s biggest lender State Bank of India (SBI), Kotak Mahindra Bank and early this week, HDFC reduced their home loan rates, intensifying competition in the lucrative market.
SBI, HDFC cut home loan rates to 6.7 percent and 6.75 percent, while Kotak Mahindra cut home loan rates to 6.65 percent.
Announcing the cut, ICIC Bank said home buyers, including those who are not its customers, can apply for home loan digitally through the bank’s website and mobile banking platform iMobile Pay.
In November 2020, ICICI Bank became the first private sector bank in the country to cross the Rs 2-lakh-crore-mark in mortgage loan portfolio. Its mortgage disbursements increased in Q3-2021 over Q2-2021 and reached an all-time monthly high in December 2020, the bank said while announcing its third-quarter results.
On March 3, mortgage lender HDFC said it had cut home loan rates by five basis points for all retail customers effective March 4. One basis point is one hundredth of a percentage point.
HDFC reduced its Retail Prime Lending Rate (RPLR) on which its Adjustable Rate Home Loans are benchmarked, by 5 basis points, the bank said in a statement.
The cut will benefit all HDFC retail home loan customers, as it would offer loans at 6.75 percent to borrowers, irrespective of the amount.
SBI reduced its home loan rate to 6.70 percent. The lender also waived processing fee for its customers. Private sector Kotak Mahindra Bank, too, cut its lending rates recently.
The Reserve Bank of India (RBI) has been prodding banks to cut their lending rates. The central bank has cut its key lending rate, repo, by 250 bps since February 2019.
The interest concession is based on the loan amount and CIBIL score of the borrower. “SBI, being the market leader in home finance, takes ownership in bolstering consumer sentiments. The affordability for the consumer increases immensely with the present offerings as the EMI will be reduced,” the bank said.
SBI home loan interest rates start from 6.70 percent for loans up to Rs 75 lakh and 6.75 percent for above Rs 75 lakh, the bank said.