HFCs off late are under serious pressure owing to an increase in their borrowing costs which has disrupted their home financing business drastically. And with it, the rub off effect has been cast on both the retail borrowers as well as property developers. Further, since there have two straight cuts in the key repo rate by the RBI in its MPC meet by 50 basis points to 6% currently, banks have also lowered down their housing loan interest rate, implying lower EMIs for end borrowers.
And amid the entire margin crisis story in case of HFCs which need fair assessment of their business plans, here we evaluate whether banks or HFCs come out to be competitive for housing loan borrowers with comparison in the interest rate from the two kinds of institutions.
Effective May 10, 2019, the country's largest state-run lender is giving housing loan below Rs. 30 lakh to women salaried class at an interest rate of between 8.55% to 8.75% while for other salaried class borrowers the home loan rate stands at 8.60% to 8.75%. Non-salaried women and men will get a loan rate of .70% to 8.80% and 8.75% to 8.85% respectively.
For up to Rs. 35 lakh, the salaried class is offered an interest rate of 9.05% and for loan amounts of Rs 35 lakh to Rs 75 lakhs and above Rs 75 lakhs, the interest rate is set at 9.15% and 9.20%, respectively.
For loans up to Rs. 30 lakh, the private sector lender charges 8.70% and 8.75% respectively from salaried women and men borrowers. And in case one is self-employed, the rates go upwards of 8.85% and 8.90% on women and men.
Housing Finance Development Corp (HDFC)
Housing Finance Development Corp (HDFC) - Home loan up to Rs 30 lakh for women, the interest rate ranges between 8.65%-9.20%. And for others, the rate varies from 8.70% to 9.20%.
PNB Housing Finance - Home loans are offered at an interest rate of 9.10% onwards and that it could go as high as 11.25% depending on the borrower category and other criterion is taken into consideration for deciding the loan amount.
Dewan Housing Finance Corp Ltd (DHFL) - The housing major offer home loan at an interest rate of 9.75% onwards.
Indiabulls Housing Finance - This housing finance company charges a loan rate of between from 8.80% to maximum 12% per annum.