Housing finance companies not to hike home loan rates

Interest rates may not go up for home loans provided by housing finance companies (HFCs), although in the present scenario the banks have hiked interest rates. These HFCs are controlled by National Housing Bank (NHB), which is not eager to hike the rates shortly. RV Verma, executive director, NHB said, “There is no real rush on the part of HFCs to raise rates. It will depend on their cost of funds”. Verma said, the HFCs would like to wait and watch the steps undertaken by banks on base rate before they decide on increasing the lending rates. He said, “Over 50 per cent of HFC funding comes from banks. If banks raise their base rates when they conduct their next round of review, the cost of funds of HFCs will be impacted. That will have a bearing on the decision of most HFCs”. Verma says that in the next review the banks will increase the base rates of banks following the present trend of deposit rate increase they have undertaken which is definitely going to hike their cost of funds. Benchmark prime lending rates (BPLR) have been increased by various lenders just recently. They include State Bank of India, ICICI Bank, Punjab National Bank, Union Bank and IDBI Bank. RR Nair, director and CEO of LIC Housing Finance said, “We do not adopt the policy of changing interest rates depending on market movement. For our existing customers, we review our rates once at the beginning of each quarter.” He added, “We have to take a view on rates on new loans”. Source: http://www.bankbazaar.com/guide/housing-finance-companies-not-to-hike-home-loan-rates/22643/ Filed under: Home loans Tagged: Home Laon Interest Rates

[via India Real Estate Tracker]