India’s Leading banks heading for rising home loan rates

February 20, 2007	(Be the first to rate this story!)  Loading ...
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Following one another whether Government or private, all banks seem to increase home loan interest rates. The country’s largest commercial bank, State Bank of India (SBI) raised its home loan interest rates by 0.25 to 0.75 percentage points, across all tenors in the floating and fixed interest rate category, the highest by any bank so far in the recent round of rate hikes.

Home loan scenario set by the private banks has already crippled the already suffering consumers. However, the worse the situation grew through the continuation of the trend by public sector banks.

SBI will bring its revised rates into effect from February 20. The bank has also raised its deposit rates to 9.75%, which is 25 bps for tenures between four and five years, and to 8.75%, 50 bps higher, for tenures of five to ten years, for a limited period up to March 31.

Talking about other leading players in the home loan segments including LIC Housing Finance and ICICI Bank, they have also raised their respective interest rates by 0.5 percentage points in Feburary.

HDFC bank is also planning to hike the home loan rates by 50-100 basis points. The bank is observing the impact of the rising borrowing costs and will come up with the final decision on rates this week.

Increasing real estate prices and rising interest rates have largely prompted the potential investors to take an exit from the market. Nevertheless, demand from genuine home borrowers would continue to be there.

The rising deposit rates and continuing credit growth have put pressure on the net interest margins of all banks.

News Published Under:   Home Loans |

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