LIC Housing Finance Limited on Monday announced a further cut in interest rates for its existing home loan borrowers following a reduction in its cost of funds. LIC Housing Finance is the only lender to have passed on the benefit of rate cuts by the the Reserve Bank of India to its existing home loan borrowers.
The rates for existing customers would be reduced by 75 basis points with effect from April 1, 2009. The reduced rates will be the lowest in almost two years. LIC Housing Finance’s PLR is down to 13 per cent from 13.75 per cent. The effective interest on floating rate loans now is 10 per cent.
Monday's rate reduction is the second by the company in the past three months. The company had earlier reduced 75 basis points for its existing home loan borrowers from January1, 2009.