Retailers go all out to woo customers during the Mumbai monsoon season. But retail home loans, too, come a little cheaper this monsoon.
One of the large housing finance companies, HDFC, has dropped rates by a quarter of a percentage point for a limited period as part of its monsoon offer. For customers applying for loans between June 18 and July 15 and taking disbursement by July 31, the rate will be a variable interest rate of 11 per cent instead of the prevailing 11.25 per cent. Processing fees during the promotion have also been reduced to 0.25 per cent from 0.509 per cent, subject to a maximum of Rs 5,000.
“Demand for loans had slowed down substantially and probably banks wants to improve disbursements,” said an analyst. The fall in the number of real estate transactions and the interest rate squeeze are hurting realty companies.
Other banks might take a hint from HDFC, the analyst added. ICICI Bank, a leader in home loans, said recently that real estate loan growth had slowed down to 20 per cent from 45 per cent a year ago.
“We have these kind of promotions from time to time, say, during Diwali,” explained the spokesperson at HDFC. Though none of the banks is yet talking of a fall in interest rates, buyers could rejoice.
“May sales were bad for us. And June has been worse. We would like to see some competitive rate offers from banks to encourage buyers and we feel there are indications that the interest rate will soften,” said Ashwin Mehta, a real estate consultant. He said some of the smaller banks, including scheduled ones, have been offering rates lower than their bigger rivals.