Interest rates on Home loans change ….

By Pallavii Pitale

India’s top most lenders, the banks like SBI, HDFCand ICICI and others who had offered special rates ( teaser rates ) on mortgages through special schemes for offtake boosting, shall withdraw the same today, the 30th June onwards and shall continue with the new system tomorrow, the 1st July, onwards.

It was a scheme featured by these banks last year with low fixed rates for the first two years shall exist no more. SBI kicked off the offer first and started with a new scheme that shall offer loans at the rate of 8% for the first year, 9% for the next two years and the same linked to market rates in the subsequent years.

HDFC and ICICI offers 8.25% upto March 2010, 9% upto 2013 and as per the prevailing rates thereafter.

RBI has made it clear to banks that any changes in the base rate will have to be applicable to existing customers as well. However, what needs to be borne in mind is that the central bank has only told banks to adopt the base rate system, which is not applicable to housing finance companies and NBFCs.

The Bankers are of the opinion that interest rates on home loans will continue to be competitive since it is a secured loan.