Leading mortgage financier LIC Housing Finance (LICHF) has announced a reduction in its home loan rates for the existing borrowers.
Interest rates have been slashed by 75 basis points from 10.75-11.25% to 10-10.5% as a result of a reduction in cost of funds.
Chief Executive Officer of LICHF, RR Nair said, "The incremental cost of funds have come down to around 8.25-8.75 percent, as against over 11 percent in October. So we have decided to pass on the benefits to existing customers."
The revised rates by the firm will be applicable with the beginning of new financial year on April 1st. This is the second cut announced by the firm in 2009. Earlier in January, LICHF has lowered the home loan rates by 75 basis points for its existing home loan borrowers.
Nair said, "With this cut, we have reduced our rates by 150 basis points in the last three months, which is more than what we increased across three tranches last year."
Meanwhile the firm had also announced a special interest rate for borrowers planning to choose floating rate loans. The special floating rates for loans up to Rs 30 lakh are 8.75% where as loans above Rs 30 lakh and up to Rs 75 lakh, interest rate charged will be 9.5-9.75%. For loans above Rs 75 lakh, LICHF will charge 10.5-10.75%.
The new scheme by the firm seems to give competition to the latest 8% home loan scheme by SBI.
LICHF reported a growth of 18% to Rs 1,944 crore in its loan disbursement during the third quarter fiscal ending on December 31st.