Tag: housing loan rates

Home loans will grow 20% on rate cuts: National Housing Bank

24 Oct 2012, ET Bureau.

MUMBAI: Housing finance regulator National Housing Bank expects a growth of 20% in loans this fiscal, up from 17% in 2011-12, with lenders slashing rates and reducing other charges. Mortgage lending business has become competitive with state-run banks aggressively cutting rates and waiving processing fees, besides doing away with the pre-payment penalty, making it easier for borrowers to switch lenders.

“Some banks are very aggressive in terms of lowering of interest rates,” said NHB chairman and managing director RV Verma. “The lowering of base rates and abolition of some of the fees have made the whole environment competitive and, going forward, we do not rule out further price wars among the banks and HFCs (housing finance companies),” Verma said.

Banks have the benefit of lower cost of funds through strong deposit franchise, while HFCs are constrained by higher cost of funds as they borrow from banks and other sources. Verma, however, said the HFCs can succeed by offering personalised service.

“Despite the slowdown in other sectors of the economy, all geographical locations for that matter, the demand for housing loans has been good and sustained, and we are seeing growth of close to 20% this year for 2012-13 as compared with last year’s 17% between banks and HFCs,” he said. NHB plans to disburse close to Rs 17,000 crore as refinance support to banks and housing finance institutions in 2012-13 against Rs 14,400 crore in 2011-12.

Federal Bank offers home loans at base rate from October 3-18

3 Oct 2012, PTI.

┬áMUMBAI: Private sector lender Federal Bank today said home loans will be offered at its base rate, which is pegged at 10.45 percent, from October 3 to October 18 as part of the 67th anniversary of its founder’s day celebrations.

The Kochi-based bank will also offer discounts in some other segments during this period.

The bank, which has 1,010 branches spread across the country, had total business of Rs 86,693 crore by end of the last fiscal.

Banks to provide 1% interest sop for home loan upto Rs 15 lakh

18 Sep 2012, PTI.

MUMBAI: Reserve Bank today asked banks to provide one per cent interest subsidy to home loans of up to Rs 15 lakh as announced by the government.

The interest subvention scheme has been liberalised with effect from 2011-12 by extending it to housing loans up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh, RBI said in a notification.

The scheme has since been extended by Government of India and will remain in force up to March 31, 2013, it said.

A Budgetary provision of Rs 400 crore has been made under the scheme for the year 2012-13 by Government of India, it said.

The Union Cabinet chaired by Prime Minister Manmohan Singh approved the scheme in July.

The limit of subsidy for an individual borrower would be Rs 14,912 for a loan of Rs 15 lakh, and Rs 9,925 for a loan of Rs 10 lakh. The extended scheme will benefit all housing loans availed in the current financial year.

The National Housing Bank is the sole nodal agency for implementation of the scheme for banks, Regional Rural Banks and housing finance companies.

Realty share in FDI slumps to 1.94% between April ’09- December ’11

22 May 2012, PTI.

MUMBAI: Owing to global financial crisis, the foreign direct investment (FDI) in the real estate sector between April 2009 and December 2011 (Q1 FY10 and Q3 FY12) declined by a drastic 92 per cent, a recent survey says.

According to a survey by consultancy firm Knight Frank, FDI in real estate declined by 92 per cent and its share in total FDI shrunk from 16.83 per cent to 1.94 per cent during this period.

“Since 2005, 21 realty companies have raised Rs 213.06 billion through initial public offer ( IPO) and follow on public offer ( FPO). Of which Rs 145.74 bn or 68 per cent was raised alone in 2007, post the opening up of FDI in real estate sector. This route of raising money witnessed a slump in the immediate next year due to global financial crisis of 2008,” the survey said.

The bursting of the US housing bubble, which peaked in 2007, caused the values of securities tied to the US real estate pricing to plummet, damaging financial institutions globally.

This had ripple effects on the Indian economy impacting the Indian real estate sector the most, it said.

The year 2008 had no new issues in the form of IPO/FPO while there was just one issue in 2009. In 2010, post the global crisis, the economy saw some support in terms of stronger UPA government at the centre which helped as many as five promoters to raise Rs 43.12 bn from the public through IPO/FPO route, it said.

However, 2011 witnessed a phenomenon of high property prices, high interest rate and low sales, the report said.

“Dismal corporate earnings growth coupled with a weak employment scenario impacted the realty industry. Funding avenues like IPOs, qualified institutional placement (QIP) and FDI, which were harnessed in the earlier years dried up,” it said.

As a leveraged balance sheet was strained amidst slowing sales, developers resorted to selling land, TDR and non-core assets and some even resorted to pledging promoter equity. Private equity (PE) and high net worth individuals (HNI) money also salvaged the position of the industry.

“Fate of fund flow through IPOs, QIP and PE is also similar. As a result, all hope is stemmed on revival in sales, which is imminent on either a robust economy or lower property price,” it said.

Repo rate cut by RBI would be ineffective: HSBC

15 Jun 2012, Reuters.

NEW DELHI: A cut in India’s repo rate would be “ineffective” given the liquidity deficit in the country, and would be “the wrong medicine” to boost growth, HSBC said in a note on Friday.

“We think deeper structural reforms are needed instead, and soon,” HSBC wrote.

It also warned that inflation pressures will continue “simmering” on the back of a weak rupee and “tight” capacity, despite the fall in oil prices and moderating growth.

HSBC added that it expected RBI “to continue to manage liquidity conditions actively” via open market operations, and did not rule out additional OMOs or cuts in the cash reserve ratio.

The Reserve Bank of India is widely expected to cut the repo rate by 25 basis points at its policy decision on Monday, with views split on whether it will also deliver a cut in the CRR.

Earlier, broking house CLSA said the RBI has “no room” to cut interest rate after WPI inflation was revised upwards in March, making it “a foregone conclusion” that the April and May data will also be revised upwards.

CLSA did not rule out “a small” cut in the cash reserve ratio after WPI core inflation for May was “stable” at 4.8 percent, as per its calculations.

Union Bank cuts home loan interest rates

18 May 2012, PTI.

MUMBAI: State-run Union Bank of India today slashed interest rates on home loans to its base rate in select case.

The new rates, which will be applicable to both existing borrowers on floating rates as well as new ones, will be able to avail of credit at the bank’s base rate of 10.50 percent, the city-based lender said in a statement here.

Loans above Rs 30 lakh but under Rs 75 lakh will be charged an interest rate of 0.25 per cent above the base rate, while those between Rs 75 lakh and Rs 5 crore will have to pay a margin of 0.50 per cent over the base rate, it said.

The bank had last month cut its base rate or the minimum rate of lending by 0.15 per cent to 10.50 per cent, following RBI’s surprise move to cut its key lending rate by 0.50 per cent at its annual credit policy on April 17

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