HDFC Slashes Lending Rates by 5 Basis Points To 6.75%

HDFC (Housing Development and Finance Corp), India's largest housing finance company, on March 4, 2021, reduced its home loan interest rates by five basis points. The home loan interest rate for new customers would now be 6.75 per cent, HDFC said in a statement, adding that the benefits will also be extended to the bank’s existing customers.

The new rates, applicable to both, existing and new borrowers, are effective from March 4, 2021. The interest rates are applicable to home loans, including home extension, home improvement and refinance/balance transfer from other financial institutions.

However, the new rates are available under the bank’s special housing loan scheme, for a limited period only, for applicants/customers applying for loans on or before March 31, 2021 and availing of disbursements (part/full) on or before April 15, 2021.

The interest rates are linked to HDFC's benchmark rate, retail prime lending rate or RPLR and are variable through the tenor of the loan.

The move by HDFC comes, after state-run State Bank of India (SBI) and private lender Kotak Mahindra Bank recently reduced their home loan rates to 6.7 per cent and 6.65 per cent, respectively. ICICI Bank has also cut its rate to 6.80 per cent while Axis Bank said it had revised lending rates to 6.9 per cent.

As against charging a certain percentage of the loan amount, the HDFC will also charge a flat processing fee of Rs 15,000 to process the loan request. However, a discount on the processing fee is available, only for salaried women applicants/co-applicants applying.