Leading player in mortgage lending, LIC Housing Finance Ltd has slashed interest rates by 50 basis points for existing home loan borrowers.
With this revision into effect, the benchmark prime lending rate of the company comes to stand at 12.5 percent as against the previous rate of 13 percent. The revised rates will be applicable for installments payable on July 1, 09 and August 1, 09.
This is the third reduction by LIC Housing Finance in the current calendar year taking the cumulative reduction in interest rates to 2 percent in a period of six months. (The lender, last reduced the rates for existing borrowers by 75 basis points in March 2009. Before this, it also reduced lending rates in January by 75 basis points.)
Presently, the company offers home loans at a flat interest rate of 8.75 percent to its new customers. The actual lending is about 250-300 basis points lower than the BPLR. Thus with this slash, the effective lending rate will be in the range of 9.5-10 percent.
In a release, the company indicated move as a consequence of reduced operational costs and reduction in cost of funds.
LIC HF, a subsidiary of public sector insurance firm, LIC, is one of India's largest Housing Finance Companies in the country, with an extensive nation-wide branch network. The company has 6 regional offices, 13 back offices and 158 marketing units, dotted across the country.