The Hindu Business Line : UBI cuts home loan rates

Mumbai May 7 Union Bank of India has taken the lead in cutting interest rates on home loans below Rs 20 lakh by 50 basis points with immediate effect.

On April 24, the RBI reduced the risk weightage on residential housing loans to individuals from the existing 75 per cent to 50 per cent.

The interest rate on fixed home loans has been revised to 10.75 per cent from 11.25 per cent. The interest rate on floating home loans has been reduced to 10 per cent (10.50 per cent) for advances up to 5 years, 10.50 per cent (11 per cent) for those above 5 years but below 10 years and 10.75 per cent (11.25 per cent) for above 10 years.

Recently, ICICI Bank had marked up floating interest rate on home loans to 12 per cent while the fixed interest rate increased to 14 per cent.

SBI's floating rate stands at 10.75 per cent for new loans up to five years and 11.25 per cent for loans above 5 years and below 20 years. The fixed rate for up to 10-year loans stands at 12.75 per cent.

Union Bank's home loan portfolio stands at Rs 4,400 crore, said Mr M.V. Nair, Chairman and Managing Director of the bank.

Home loans of the bank grew by 12 per cent in 2006-07, against 35 per cent in the previous year. "We had gone slow on home loans last year because we had experienced delinquencies in the year before," said a senior bank official.

More Stories on : Housing Finance | Interest Rates | Public Sector Banks

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