The aggressive competition among housing finance providers have led to a price war in which the housing finance companies are constantly slashing their interest rates. This trend, among banks and housing finance firms, will eventually benefit home loan borrowers, said Mr. R. V. Verma, the Chairman and Managing director of National Housing Bank.
Verma further added that inspite of having high funding requirements, these home loan lenders, will continue to withstand competition because of their core competencies in areas of quality of service and turnaround time.
It is reported that after the slowdown in corporate loans segment, banks are increasing their retail loans products aggressively this festive season. Take for instance the festive season offer by State Bank of India, which is providing home loans till Rs. 30 lakh at 10 percent interest rate, a reduction from the earlier rate of 10.75 percent. Similarly, loans above Rs. 30 lakh are being provided at interest rates of 10.15 percent, declining from 11.25 percent.
The NHB chief also added that the current trend in home loans segment implies that the economic slowdown has not had an adverse effect on demand for home loans and that its demand is steady despite tough economic conditions.