HDFC May Slash Home Loan Rates Next Week

HDFC Bank to Slash home loan rates
Mumbai: Housing Development Finance Corporation Ltd is likely to cut interest rates on home loans by next week.

Renu Karnad, Executive Director, HDFC, told that the housing finance major had seen a 50 basis point decrease in its funds cost, as compared to the last month.

At present, HDFC’s key lending rate is 14%. In the first three months of the recent fiscal, its funds cost had increased to 8.75% from 6.9% in the year-ago period.

The disbursements remained up 29% in the same period at Rs 5,645 crore.

On the sidelines of a function organized by the Bombay Chamber of Commerce and Industry, Deepak Parekh, Chairman, stated that home loan maturation would be 26-27% in the second quarter and they projected it to be about 20-25% in 2007-08.

Mr. Parekh also said that that the property rates have weakened and there has been a deceleration in property sales.

“The investors have gone out,” he added.

While discussing the joint venture for its general insurance he stated that they would decide a foreign associate for the joint venture in 15 days.

Among other banking institutions, Bank of Baroda and IDBI have recently slashed their rates of interest on home loans.

Asked about a rate cut by the RBI in the light of moderating inflation rate, Mr. Parekh said while there was a case for cutting rates, one had to be careful of the money supply in the system.