HDFC reduces lending rate, funds cheaper for home loan borrowers

Feb 06 2013, 10:01 IST
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SummaryHDFC on Tuesday reduced benchmark lending rate by 0.1 per cent.

HDFC, the country's largest mortgage company, Tuesday reduced benchmark lending rate by 0.1 per cent, making funds cheaper for home loan borrowers.

Interest rate on home loans up to Rs 30 lakh will come down to 10.15 per cent while above Rs 30 lakh will be 10.40 per cent. The new rates would be effective from tomorrow, HDFC said in a statement.

"Over the past couple of months we have seen a drop in Cash Reserve Ratio and cut in repo rate which have resulted in our costs of funds at a portfolio level come down and as always the company has ensured that benefit is passed on to existing customers by way of a reduction in RPLR" HDFC Managing Director Renu Sud Karnad.

"We have over the last few months also seen that the measures taken by the Government has improved sentiment which will provide more confidence to customers wanting to buy a house," she said.

A host of lenders, including State Bank of India (SBI), Punjab National Bank, Bank of India and Bank of Baroda, have cut their lending rates, following easing of monetary policy by the Reserve Bank.

The RBI in its third quarter policy review on January 29 had lowered key short term lending rate by 0.25 per cent and also injected Rs 18,000 crore liquidity through similar reduction of Cash Reserve Ratio.

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