LIC Housing Finance today launched a new product, ‘Griha Siddhi’, which will offer loans for construction, purchase of house or flat and repairs or renovation to the existing properties. Under the new product, borrowers will be offered interest rate of 8.40 per cent up to Rs 25 lakh and for loans up to Rs 1 crore, the interest rate will be 8.50 per cent per annum, the company said in a statement here today. For women borrowers, the mortgage lender is offering a special interest rate of 8.35 per cent for loans up to Rs 25 lakh. Pushing the affordable housing loan segment after State Bank of India (SBI), housing finance major LIC Housing Finance has launched a home loan product at 8.40 percent for loans up to Rs 25 lakh. The NBFC will offer loans to women at 8.35 percent.
The government owned housing finance company will offer the new rates under its new home loan product ‘Griha Siddhi’, which are customized home loan products offered for construction/purchase of house or flat and repairs/renovation to the existing properties, the company said. Loans are offered for a maximum tenure of 30 years or retirement age in case of salaried employees and for other borrowers, the maximum term is up to 25 years. For loans up to Rs 1 crore, the interest rate will be 8.50 percent. The new rates will be applicable to new borrowers.
In a rush to push growth in the affordable housing loan segment, banks and non-banking finance companies are looking at making interest rates more competitive. SBI, country’s biggest bank, has the largest home loan share in the market. It is offering home loans up to Rs 30 lakh to salaried borrowers at 8.35 percent. For loans above Rs 30 lakh, the bank will charge 8.50 percent. It will continue to charge 8.60 percent on loans above Rs 75 lakh.
Prior to the loan rate reduction, SBI recently cut deposit rates by 50 basis points or percentage points across different maturities. The bank said borrowers can also avail of an interest subsidy of Rs 2.67 lakh, if eligible, under the Pradhan Mantri Awas Yojana scheme. This comes at a time when loan growth is at a multi-year low below 5 percent and lenders are pushing retail loans, especially the affordable housing loans which are boosted by the government push.