ICICI, Axis Bank, NBFCs join home loan rate cut war

ICICI Bank, Axis Bank and mortgage lenders Indiabulls Housing Finance (IBHFL) and DHFL reduced home loan rates for both existing as well as new borrowers following in the footsteps of bigger rivals HDFC and State Bank of India (SBI).

While ICICI Bank cut the interest rate on home loans by 0.25, Axis Bank and India Bulls announced a 0.2 per cent reduction, and DHFL by 0.25 per cent ICICI Bank said that women borrowers and financially weaker sections will now get home loan at 9.85 per cent while for other borrowers it will be 9.90 per cent. The cut in the home loan rate is in line with the base rate reduction of 0.25 per cent announced last week as there is no tinkering with spreads on loans.

ICICI Bank said that reduction of home loan rates with effect from Tuesday is valid for all existing and new customers. The interest rate for fixed rate home loans have also been reduced. Borrowers taking fixed-rate home loans with tenure of 10 years for loan amount up to Rs 30 lakh will have to pay 9.90 per cent, the same effective interest rate applicable for floating rate home loans, ICICI Bank said.

With effect from April 10, the new base rate or the minimum lending rate is 9.75 per cent. The move will benefit all existing customers of floating home loans, whose home loan rates will be reduced by 0.25 per cent as per the change in the base rate, the statement said.

Axis Bank, the third-largest private sector lender, reduced rate on home loan by 0.20 per cent to 9.95 per cent on par with its base rate effective Tuesday. The bank has also introduced a single slab applicable for all salaried customers irrespective of the loan amount. The bank has accordingly aligned the pricing for new borrowers, Axis Bank said in a statement.

IBHFL has reduced rates of home loans to 9.90 per cent, a reduction of 0.2 per cent from its existing rate of 10.10 per cent. The reduced rates will be applicable from April 14 onwards, the company said.