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Banks lure customers with lower interest rates on home loans

Money Control

Money Control · 1y ago

Banks lure customers with lower interest rates on home loans

Banks in India, including HDFC Bank, State Bank of India (SBI), and IDFC First Bank, are offering lower interest rates on home loans for customers with good credit records. These banks are aiming to attract more customers and compete in the mortgage market. Home loans at discounted rates are being provided by banks to customers with good repayment history and credit scores. This strategy is proving successful, as SBI's home loan portfolio grew by 13.16% in the October-December quarter, and HDFC Bank's market share in home loans increased by 18-20% after merging with Housing Finance Development Corporation.

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Home loan segment: Private banks feel the pinch as PSUs, HFCs come home

Economic Times

Economic Times · 1m ago

Home loan segment: Private banks feel the pinch as PSUs, HFCs come home

Private banks are under pressure in the home loan market as government banks and housing finance companies (HFCs) reduce interest rates to attract customers, posing stiff competition. While public sector banks offer more competitive rates starting at 7.35%, private banks offer slightly higher rates, leading to challenges in expansion due to thinner margins. Major private banks saw varying growth in their home loan portfolios, with some focusing on more profitable segments to safeguard profitability.

RBI Policy Impact on Home Loans: EMIs to stay unchanged as central bank holds repo rate at 6.5%

Money Control

Money Control · 1y ago

RBI Policy Impact on Home Loans: EMIs to stay unchanged as central bank holds repo rate at 6.5%

The Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.5 percent for the sixth consecutive time. This means that home loan interest rates will remain stable for now. Home loan rates currently range from 8.30 percent to 8.75 percent, making it a favorable market for new borrowers. However, existing borrowers may continue to face higher interest rates for a few more months. To mitigate this, borrowers have the options of refinancing their loans to a lower rate, making part-prepayments, or switching lenders to take advantage of lower interest rates.

Up to 58% of home loan borrowers take Rs 10-50 lakh loans: Bank of Baroda study

Money Control

Money Control · 1y ago

Up to 58% of home loan borrowers take Rs 10-50 lakh loans: Bank of Baroda study

According to a Bank of Baroda study, more than half of the loans disbursed in India by banks are home loans. Personal loans make up nearly 29% of loans disbursed, followed by vehicle loans at 9.8%. The study aims to examine the composition of personal loans and changing trends. It includes categories such as home loans, education loans, and consumer durables loans. As of September 2023, a significant portion of home loans in India had interest rates in the range of 9-11%.

A bellwether signal? SBI hikes home loan rates by 25 basis points

Economic Times

Economic Times · 13d ago

A bellwether signal? SBI hikes home loan rates by 25 basis points

State Bank of India (SBI) has increased home loan rates by 25 basis points for new borrowers, indicating a potential shift towards higher interest rates in India's home loan market. This rate hike primarily impacts applicants with lower credit scores. Union Bank of India has also raised its rates, with other public lenders potentially following suit. The move may signal a strategic shift from low-margin retail loans, aiming for lending segments that offer better profitability.

LIC Housing Finance reduces interest rate in line with recent RBI repo rate cut

Economic Times

Economic Times · 2m ago

LIC Housing Finance reduces interest rate in line with recent RBI repo rate cut

LIC Housing Finance has reduced its interest rate on new home loans by 50 basis points, aligning with the recent RBI repo rate cut. This change makes new home loan interest rates start at 7.50%, effective June 19, 2025. The reduction aims to benefit new home loan customers, enhance affordability, and boost housing demand, particularly in affordable and mid-income segments. The move coincides with LIC Housing Finance's 36th Foundation Day and supports RBI's economic stimulus efforts.

Bank of Maharashtra slashes retail loan rate by up to 50 bps

Economic Times

Economic Times · 2m ago

Bank of Maharashtra slashes retail loan rate by up to 50 bps

The Bank of Maharashtra, a state-owned bank, has reduced interest rates on retail loans by up to 50 basis points, effective from June 10, following the Reserve Bank of India's rate moderation. The reduction applies to home, car, education, and other loans linked to Repo Linked Lending Rate, making its rates among the lowest in the banking industry. This adjustment reflects the bank's commitment to offer competitive financing solutions and support customers' financial aspirations.

Wall Street banks resurge in second-lien loan market amid high demand

Economic Times

Economic Times · 2m ago

Wall Street banks resurge in second-lien loan market amid high demand

Wall Street banks are re-entering the market for second-lien loans—considered riskier corporate debt—due to growing demand from private credit firms and conventional investors. These loans, typically priced higher than first-lien loans, now attract enough interest to offer competitive interest rates. Banks profit from syndicating these loans, which were previously dominated by direct lenders, helping reduce borrowing costs for issuers. Recent transactions have seen strong demand, indicating robust investor interest in riskier debt.

Public vs private banks: Who offers the cheapest home loans now after RBI's 50 bps repo rate cut? - The Economic Times

Economic Times

Economic Times · 2m ago

Public vs private banks: Who offers the cheapest home loans now after RBI's 50 bps repo rate cut? - The Economic Times

The Reserve Bank of India's latest 50 basis point repo rate cut leads to reduced home loan interest rates, potentially lowering EMIs or shortening loan tenures for borrowers. Public and private banks offer varied rates, requiring borrowers to compare fees, processing speeds, and other terms. With differences in costs and approval times between public and private banks, borrowers are encouraged to assess all aspects before committing to revised home loan agreements.

CIBC Says Rate Cut Means Time Has Come to Buy Discount Bank Stocks

Livemint

Livemint · 11m ago

CIBC Says Rate Cut Means Time Has Come to Buy Discount Bank Stocks

Canadian Imperial Bank of Commerce (CIBC) analysts are recommending equity investors to switch from premium-traded Canadian banks to discounted banks, as lower interest rates and reduced economic risks present greater earnings potential for the cheaper stocks. CIBC upgraded Bank of Nova Scotia to an outperformer rating and downgraded National Bank of Canada to neutral, stating that the easier borrowing costs and diminished economic risks mean banks do not have to allocate as much money for bad loans. CIBC highlighted Scotiabank as the "right trade" due to its unique exposure and potential for earnings growth.

A 3% Mortgage Rate in a 7% World? This Startup Says It Can Do That

Livemint

Livemint · 1y ago

A 3% Mortgage Rate in a 7% World? This Startup Says It Can Do That

New real-estate company Roam aims to popularize "assumable loans," which allow home sellers to transfer their mortgage loans to buyers along with the house. Roam will assist with paperwork and work with the seller's mortgage company on behalf of the buyer and seller. However, loan assumptions haven't gained much traction, despite rising mortgage rates. These assumptions could provide an opportunity for home buyers to inherit lower-rate loans, but many lenders are hesitant due to increased workload for less profit. Roam plans to launch in several US states and collect a fee of 1% of the purchase price from the buyer.

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