SBI, Kotak Mahindra Bank and HDFC have cut their home loan rates way down to 6.65%. However, only those with a higher credit score will be offered these rates. Others will get 7%-rates.

Home loan rates have dropped to a jaw-dropping sub-7% range, last seen 15-20 years back, and are luring buyers to the real estate market.However, lenders are not offering such low rates to all, but only to the borrowers who have high creditworthiness.

State Bank of India

The SBI announced an interest concession of up to 70 bps with interest rates starting from 6.7% onwards for a limited period till March 31, 2021. The lender is also giving a 100% waiver on processing fees.

However, its interest concession is based on loan amount and CIBIL score of the borrower. SBI believes that it is important to extend better rates to customers who maintain good repayment history. SBI home loan interest rates are linked to CIBIL score and start from 6.7% for loans up to Rs 75 lakh and 6.75% for loans above Rs 75 lakh.

SBI is offering such rates to borrowers who have a CIBIL credit score of above 800, according to reports. At SBI borrowers credit scores of 700-750 will have to shell out a higher rate of 6.9% on home loans, whereas those in the 751-800 band will be eligible for loans at 6.8%.

CIBIL score

According to CIBIL, about 79% of loans sanctioned are for people with 750-plus score. Scores above 800 are considered high and you can easily ask for a lower rate on personal loans and credit cards.

A score of 850 – 900 shows that the borrower has never defaulted even once and is an excellent score.

The credit bureau scores are used to assess the creditworthiness of borrowers and lenders often offer lower interest rates to customers with higher scores.

Kotak Mahindra Bank

Kotak Bank also recently announced a 10 basis points (bps) cut in its home loan rates for a limited period, while claiming it to be the lowest in the market. Customers will be able to avail of home loans for 6.65% till March 31 as part of a special offer after the rate reduction. The 6.65% rate is applicable to both home loans and Balance Transfer Loans across amounts. This is a limited period offer ending on 31 March. The lender is also giving a 100% waiver on processing fees.

HDFC

HDFC slashed home loans interest rates by 5 basis points to 6.75%. The changes will be effective from Thursday (4 March). The company reduced its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 5 basis points. The change will benefit all existing HDFC retail home loan customers.

Booming sales

Housing sales rose 25 per cent year-on-year during the October-December period at 1,10,811 units across seven cities on pent up and festive demand, according to data analytic firm PropEquity. Housing sales stood at 88,976 units in the year-ago period.

Showing signs of recovery, total sales of home units in seven cities increased 78 per cent in the fourth quarter of 2020 to 1,10,811 units as against 62,197 units in the third quarter of 2020.

Source :
https://bfsi.economictimes. indiatimes.com/news /banking/home-loan- rates-hit-rock-bottom- only-for-those-with- high-credit-scores /81341427