ICICI Bank has now become the latest bank to cut its home loan rate. The second largest bank has cut interest rates for new home loanICICI Bank
buyers by 25-50 bps. This is the first large private sector player to cut interest rates on home loans. ( Watch )
Earlier State Bank of India and post that Canara Bank had slashed interest rates on home loans.
According to the new floating rate structure, for home loans less than that of Rs 20 lakhs, the interest rates would be at 9.75% as against 10% earlier. For loans between Rs 20-30 lakhs, the new rate would be at 10% as against 10.5% earlier, while for loans of Rs 30 lakhs and above, the interest rates would be at 11.5% as against 12% earlier.
Interestingly the bank has not cut interest rates for existing home loan customers.
Earlier this week Canara Bank had said that it would charge an interest rate of 8.25% for the first year for loans upto 20 years. Last month, SBI announced a home loan scheme where interest rates for first year were fixed at 8% and were subject to change from the second year.
Canara Bank decided to fix the loan tenure for 20 years with different rates for different slabs. For home loans upto Rs 30 lakhs, country’s second largest PSU bank proposed a fix rate of 8.25% for first year and a fixed rate of 9.25% from second to fifth year. From the beginning of sixth year to twentieth year the bank will charge customer 200 basis point below the than prevailing BPLR.
For loans which are above Rs 30 lakhs but below Rs 99 lakh, the bank will charge 50 basis points more. This will work out to fix rate of 8.75% for first year, 9.75% from second to fifth year and 250 bps below the then prevailing BPLR from the sixth to twentieth year. The bank has fixed a floor rate of 10% for period between sixth year to 20 years. This means that even if BPLR of the bank falls below 12%, the interest rate charged to the customer will be fixed at 10%.
Click for more info