Banks to cut home loan rates by Diwali, post the credit policy meetBanks are expected to cut home loan rates by Diwali, post the credit policy meet on October 24, 2008.
Apnaloan.com Research Bureau
22 Oct 2008
While there are not been much on festival offers for this season, commercial banks are expected to cut home loan rates by about 50 basis points following the Reserve Bank of India's (RBI) repo rate cut on October 21, 2008.
State Bank of India (SBI) is expected to decrease the retail housing loan rate before Diwali. Punjab National Bank (PNB) and Union Bank of India (UBI) have already cut rates by up to 50 basis points, though this may not be applicable to all loans. The Union Bank of India (UBI) has slashed rates by 50 basis points for loans up to Rs 30 lakh.
Private home loan providers such as HDFC and ICICI plan are yet to announce any rate cut.
While the reduction for loans above Rs 30 lakh is of about 25 basis points, media reports say that for loans of Rs 75 lakh and above, there may not be a reduction.
Some banks such as SBI have put a new ceiling of housing loans above Rs 75 lakh; with a different rate structure for these loans. Though, the government recognises only two types of home loans, those below and above Rs 30 lakh.
Most banks are awaiting Reserve Bank of India's (RBI's) half-yearly monitory policy on October 24 before cutting down the rates.
Banks have also taken to following stringent norms for deciding an individual's creditworthiness while granting a loan to avoid a subprime-like trap.