Business & Economy

HDFC launches new dual rate home loan product

NetIndian News Network

Mumbai, April 15, 2010

Housing finance major HDFC Limited today launched a new home loan product that will carry a fixed rate of 8.25 per cent upto March 31, 2011, 9 per cent for a year thereafter and the applicable floating rate for the balance term.

A press release from the company said the fixed rates were applicable for all new loans, irrespective of the loan amount. The existing floating rate product continues without any change, where the rates applicable are 8.75% for loans up to Rs 30 lakhs, 9% for loans between Rs 30 lakhsand Rs 50 lakhs and 9.25% for loans of Rs 50 lakhs and above .

HDFC Managing Director Renu Sud Karnad said the response to the earlier dual rate scheme was overwhelming. "With our cost of funds permitting us to offer a lower initial fixed rate, we have introduced the DRHL-2," she said.

The release said the offer was applicable to all new home loan customers who apply before 30.4.2010 and take at least part disbursement before 30.6.2010.

While the fixed rate will remain the same irrespective of the loan amount, the floating rate will vary with the loan amount. Under this offer, the floating rates has two slabs: loans upto Rs 30 lakhs where the rate will be 9 % and above Rs 30 lakhs where the rate will be 9.25%.

"Even though there is a marginal increase as compared to the earlier offer , our effective rate over a 15/20 year term is very attractive and is much better than other large players in the market offering similar products," Ms Karnad said.

She said that HDFC would also allow the option to all customers whose loans were fully undisbursed as of April 14 to convert to this product without any conversion fees.

The release said the special interst rate under DRHL-2 is available to the NRI and PIO customer segments too. Self-employed customers can also apply under the DRHL-2 and avail the same special interest rate offer.