At a time when interest rates appear to be peaking, lenders have started offering fixed-cum-floating interest rate home loan products.
Housing finance major HDFC Ltd on Monday launched ‘Fixed First' – a fixed-cum-floating interest rate home loan product. Last month, ICICI Bank had introduced a similar product.
HDFC's scheme offers two options — the first where the fixed interest rate is available for the initial three years and the second where the fixed period is for the initial five years. Thereafter, the loan will switch automatically to HDFC's Adjustable Rate Home Loan (ARHL) product.
The new product is in addition to all the existing home loan options being offered by HDFC. The scheme is available till October 31 and the first disbursement must be availed of on or before November 30, said a press release issued on Monday.
This product is different from the earlier fixed-cum-floating because the interest rates are higher than the regular floating rate interest in certain slabs, said a spokesperson from HDFC. There is no discount.
“This option is for customers seeking to lock in their home loan interest rates and not take risk on interest rates moving up in the initial years,'' the release said.
Under the three-year option of the product, the fixed rate will be available up to November 30, 2014, while under the five-year option the fixed rate will be available up to November 30, 2016.
The rate of interest applicable after the fixed period shall depend on the retail prime lending rate at the time of the switch of the loan.
The fixed rates of interest for the three-year option are 10.75 per cent on loans up to Rs 30 lakh, 11.25 per cent on loans of Rs 30-75 lakh and 11.75 per cent on loans over Rs 75 lakh.
The fixed rates of interest for the five-year option are 11.25 per cent on loans up to Rs 30 lakh, 11.5 per cent on loans of Rs 30-75 lakh and 11.75 per cent on loans above Rs 75 lakh.
The floating rates on the switch to floating rates based on current RPLR for loans up to Rs 30 lakh is 10.75 per cent, for loans of Rs 30-75 lakh it is 11 per cent and for loans above Rs 75 lakh it is 11.50 per cent.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.