On the heels of public sector banks slashing home loan rates, LIC Housing Finance has announced a 1.75-2.25 percentage point cut in lending rates for home loans up to Rs 20 lakh from December 17.
LIC Housing Finance Director and Chief Executive R R Nair said, “We have reduced our lending rates with effect from December 17. For a five-year term, our lending rate for loans up to Rs 20 lakh is 9.25 per cent and for those beyond five years, the rate will be 9.75 per cent.
For loans above Rs 20 lakh, the rate has been reduced from 11.50 per cent to 11.25 per cent, Nair said. Public sector banks recently cut their lending rates on home loans up to Rs 5 lakh to 8.5 per cent and loans of Rs 5-20 lakh to 9.25 per cent for the first five years, after which the lending rates will be reset.
The scheme, which is applicable for loans taken till June 30, also offers free life insurance cover and exemption from pre-payment penalties to borrowers in these categories.
LIC Housing Finance is offering floating rates for home loans. Within six months it will be linked to prime lending rates (PLR) minus 3 percentage points, or 2.5 per cent, depending upon the customer profile, Nair said. The rates will be reviewed on April 1 or July 1 next, he said.
Nair said, “Though the Government has directed public sector banks to give a five-year fixed rate, we cannot give fixed rates for five years because of possible uncertainties in market trends.”
Filed under: Home loan, Home loan India, Home loan rates | Tagged: Home loan rates, lending rate, LIC, market trends, prime lending rate
