HDFC launches a festive offer; lowers the mortgage interest rate to 6.7%
The Housing Development Finance Corporation (HDFC) joined the mortgage interest rate war among lenders over the holiday season by slashing rates from 45 to 60 basis points (bps) for borrowers with a credit score above 800 for loans above Rs 75 lakh.
The discount will be available until the end of October. Last week, two public sector lenders, the State Bank of India and the Bank of Baroda (BoB), also cut rates by 25 to 45 basis points in an attempt to expand their mortgage business.
HDFC, the world’s largest housing finance company, said customers can qualify for new home loans starting at an interest rate of 6.70% per annum regardless of loan size or category of loan. ‘use. For employees, the relief is 45 bps and 60 bps for the self-employed.
Over the past two years, house prices have remained more or less unchanged in major pockets of the country, while income levels have risen. Record interest rates, subsidies under Prime Minister Awas Yojana and tax breaks have also helped, said Renu Sud Karnad, managing director of HDFC.
Regarding the implications of the rate revision, Samantak Das, Chief Economist and Head of Research and REIS, JLL India, said the reduction is linked to credit scores and applies regardless of amount or category. employment, the market will be supported by cheaper credit. available in all categories of residential buyers.
According to data from the Reserve Bank of India, banks’ mortgage portfolio grew 8.9% year-on-year to Rs 14.66 trillion through July.
HDFC’s assets under management reached Rs 5.74 trillion in June, up from Rs 5.31 trillion a year ago.
Factors driving demand for homes and loans to buy them include increased affordability due to increased disposable income and the lowest interest rates ever on home loans.
Analysts said although the current supply is limited until the end of October, lenders, including HDFC, could extend it until the fourth quarter, depending on economic growth and the RBI’s stance on rates. of interest. Other factors include tax incentives on interest and principal amount for mortgage borrowers and interest subsidies for economically weaker sections and lower income groups.
India’s favorable demographics, with 66% of the population under the age of 35, ensure significant potential for home loans. Analysts also predict that rapid urbanization is expected to continue and expect the population of people residing in cities to grow from the current 32% to 50% by 2030.