ICICI cuts home loan rates to a decadal low
- ICICI Bank’s move comes days after rival lenders such as State Bank of India (SBI), Kotak Mahindra Bank and Housing Development Finance Corp. Ltd cut their home loan rates.
CICI Bank Ltd on Friday said it has lowered its interest rate on home loans of up to ₹75 lakh to 6.7%, its lowest in 10 years. The new interest rate, the bank said, will be applicable from Friday to March 31. For loans above ₹75 lakh, interest rates begin at 6.75%.
ICICI Bank’s move comes days after rival lenders such as State Bank of India (SBI), Kotak Mahindra Bank and Housing Development Finance Corp. Ltd cut their home loan rates.
Ravi Narayanan, head (secured assets) at ICICI Bank, said in a statement that the bank is seeing a resurgence in demand from consumers, who want to buy homes for their own consumption, in the past few months. “We believe that this is an opportune time for an individual to buy a dream home, considering the prevailing low interest rates,” said Narayanan.
Flush with liquidity and in tandem with Reserve Bank of India’s (RBI’s) repo rate cuts since March last year, banks have been lowering their lending rates. Home loan rates at present are at a 15-year low, experts have pointed out. However, lenders are still being picky and pricing loans differently, depending on the risk profile and creditworthiness of borrowers.
For SBI and Kotak Mahindra Bank, the rate of 6.7% and 6.65%, respectively, are available only to borrowers with a credit score of 800 and above. Typically, credit bureau scores are used to judge the creditworthiness of borrowers and are essential for getting loans, with some lenders offering lower interest rates to customers with higher scores.
In November, ICICI Bank announced it crossed the ₹2-lakh crore mark in mortgage loans. Lenders have preferred secured assets over unsecured ones, and home loans are one of the most sought-after businesses. With an immovable asset like a house as collateral, banks and non-banks have been quite bullish on mortgages.