Largest private sector lender ICICI Bank, two weeks ago launched a special home loan scheme offering fixed rate loans for the first one and two years, HDFC, India's oldest mortgage firm. introduced a scheme that allows borrowers to fix their interest rates for 3 or 5 years. After this, loans will be priced at the applicable floating rate for the remaining period.
The ICICI Bank scheme allows fixing of home loan rates for a year at 10.5% for loans of up to Rs. 25 lakh, 11% for loans of Rs. 25 lakh to Rs. 75 lakh and 11.5% for loans of more than Rs. 75 lakh.
HDFC's new rates are either on a par or higher than its current floating rate. While loans fixed for three years are 0.25% higher, five-year fixed loans are 0.5% higher than its current floating rate.
Besides, HDFC also offers a fixed rate loan for the whole tenure 20 years at 12.5%.
Such special schemes came under the scanner of RBI last year and banks were told to keep aside more capital if they offer the so-called “teaser“ loans at low rates in the first few years and jack up the rates later.
State Bank of India, nation's largest lender, offered “teaser“ loans in the wake of the 2008 global credit crunch to prop up demand and gain market share.
With Rs 81,950.88 crore on June 30, HDFC has the second largest home loan book in the country after State Bank of India. ICICI Bank had not grown its home loan book in 2010-11 because it was weeding out bad loans
HDFC scheme
The “fixed first“ scheme allows only new borrowers to fix their interest rates for loans up to Rs.30 lakh at 10.75% for 3 years and 11.25% for 5 years. For loans of Rs.30 lakh to Rs. 75 lakh, the rate will be 11.25% for 3 years and 11.5% for 5 years, respectively. Borrowers raising more than Rs. 75 lakh will have to pay 11.75% for up to 5 years. ICICI Bank scheme
HDFC's new rates are either on a par or higher than its current floating rate. While loans fixed for three years are 0.25% higher, five-year fixed loans are 0.5% higher than its current floating rate.
Besides, HDFC also offers a fixed rate loan for the whole tenure 20 years at 12.5%.
Such special schemes came under the scanner of RBI last year and banks were told to keep aside more capital if they offer the so-called “teaser“ loans at low rates in the first few years and jack up the rates later.
State Bank of India, nation's largest lender, offered “teaser“ loans in the wake of the 2008 global credit crunch to prop up demand and gain market share.
With Rs 81,950.88 crore on June 30, HDFC has the second largest home loan book in the country after State Bank of India. ICICI Bank had not grown its home loan book in 2010-11 because it was weeding out bad loans
No comments:
Post a Comment