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HDFC cuts prime lending rate

Our Bureau

MUMBAI, March 7

HOUSING Development Finance Corporation (HDFC) has dropped retail prime lending rate (RPLR) by 0.75 percentage points to 12.75 per cent and also introduced adjustable rate home loans to NRIs.

As per the revised rates, effective March 8, the rate for loans up to Rs. 1 crore for adjustable home loans would be 12.75 per cent and fixed rate loans would be 13.25 per cent, irrespective of the loan period up to a maximum of 15 years.

In the case of NRI loans, the effective rate of interest rate would now be 11.25 per cent for loans up to five years. For NRIs, the adjustable home loan will be available for 20 years. There will be no prepayment charges for adjustable rate home loans.

The reduction in interest rates followed the Budget proposal to remove the tax on interest rates. A fall in the company's borrowing cost also facilitated the rate cut, an HDFC official said.

HDFC has also introduced new products such as loans for education and other personal loans against mortgage of property under the home equity loan facility.

The revised rate of interest will be applicable to new loans as well as loans which are approved but not yet disbursed.