PSU banks to offer cheaper home loans with slab rejig

Now, state-run banks will charge 9.25% or home loan interest rate for the first five years on home loans up to Rs 30 lakh, in a bid to revive housing demand.

At present, public sector banks offer a special rate of 9.25% for the first five years only on loans up to Rs 20 lakh, under a special scheme open till June 30, 2009.

The banks are working to extend the cap for availing of the special offer to Rs 30 lakh by restructuring their loan slabs and keep the offer open for a longer period, executives said.

Corporation Bank, for instance, would do away with two concession slabs of up to Rs 5 lakh and Rs 5-20 lakh and replace them with a new slab of up to Rs 30 lakh.

"We are working on restructuring of slabs for home loans to bring down the lowest slab to Rs 30 lakh. We find that 75 % of the demand for home loans was in this segment," the bank's chairman and managing director JM Garg said.

He said the rate of interest for the first five years will be capped at 9.25% or lower. "There is further room for interest rate cuts and our next asset liability committee is to take a call," Mr Garg added.

Check Important Tools:

Source: Economic Time
May 2009
Apply Here