In a move that could intensify the price war in the housing finance market, LIC Housing Finance (LIC HF) has lowered its minimum home loan rate from 6.90% to 6.66% for salaried customers.
The move by the mortgage lender comes more than a month after the RBI, on June 4, 2021, decided to maintain a status quo on key lending rates in order to support the economy at a time when the second wave of the Coronavirus pandemic has derailed hopes of a speedy recovery after the first wave.
The low rate offered by India’s largest insurer-backed housing finance company, however, is available to borrowers for a limited period till August 31, 2021. Borrowers can apply for LIC Housing Finance home loans through the mortgage lender’s app, HomY. This means there is no need for the applicant to visit the LIC Housing Finance branches to get their home loans approved.
To get the benefit of the low rates by LIC Housing finance, the borrower will have to get his loan approved by that date and get it disbursed by September 30, 2021.
“Considering the impact of the pandemic, we wanted to offer an interest rate that would help in uplifting the overall sentiments and aid more individuals to fulfil their dream of owning their own house. We hope that this reduction in home loan interest rate will further boost customer confidence and help in early revival of the sector,” LIF HF managing director and CEO, Y Viswanatha Gowd said in a release.
The reduced rate of 6.66% – slightly higher that the lowest home loan interest of 6.65% in the market provided by private lender Kotak Mahindra Bank and state-run Punjab and Sind Bank – is available only to salaried individuals applying for home loan of up to Rs 50 lakhs. The highest tenure for such a loan could go as far as 30 years. In case the home loan amount is over Rs 50 lakhs and up to Rs 1 crore, the interest rates would be 6.9%. For non-salaried customers engaged in personal business, the lowest home loan interest is 7%, irrespective of the loan amount.
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The rate of interest would be linked to the borrower’s creditworthiness, as reflected by their CIBIL scores, the mortgage financier said. Recall here that all banks in India offer their best rates to customers with high credit scores -such a borrower would have a credit score of 800 and above.
Home loan documents
Property documents (in case the property has been identified)
Source: LIC HFL