Housing Development Finance Corporation will cut floating interest rates on new home loans by 50 basis points effective Tuesday, a senior company official said today.
"We have decided to lower floating interest rates on new home loans by 50 basis points. We will take a view on interest rates on existing home loans and fixed interest rates on new loans after the Reserve Bank of India's review of its monetary policy on Oct 30," the official said. Shares of the mortgage lender rose 1% to 2,385 rupees on the NSE immediately on the news.
The official said HDFC was waiting for the central bank's views on the current economic scenario and its assessment of the fallout of subprime mortgage crisis in the U.S. economy. The U.S. Federal Reserve Tuesday cut its key federal funds' rate by 50 bps to 4.75% in a attempt to shore up the economy from the housing market crisis and its fallout on the financial markets.
Even though the headline inflation rate has fallen sharply in India to 3.32% for week ended Sep 8 from an over two-year high of over 6.69% in January, most analysts do not expect the RBI to lower interest rates at least in the October policy as concerns over inflation still remain.
Renu Karnad, ED, HDFC said that the 50 bps reduction in rates is for new home loans. the rate cut in home loan is for the disbursements up to October and the financial institution will decide on continuation of rate cut post credit policy by the RBI.
She said that the company is waiting for RBI move for taking stand on Interest rates. The benefit of lower cost of funds are being passed on to the customers. She said that HDFC is not in market share game and is focusing on bottomline growth. She believes that no more interest rate hikes is a cheer for housing market.
0 comments:
Post a Comment