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Banks offer festive discounts on home loan interest rates

By Rishabh Chamoli | 2022-10-17

At a time when the economy is witnessing the shockwaves of inflationary forces, several banks and financial institutions are offering some respite from high interest rates in the form of festive discounts. These offers may give a much-needed push to the realty market suffering amid high input costs.

The Reserve Bank of India (RBI) has hiked the repo rate four times this year by a total of 190 basis points, taking it up to 5.9 percent presently. Various banks and financial institutions have followed the footsteps of the apex bank by increasing their lending rates. This has automatically impacted the monthly takeout of the borrowers, discouraging many potential homebuyers from taking home loans and investing in real estate. However, with the festive season just around the corner, a number of banks have announced limited period festive discounts by slashing their home loan interest rates as Diwali is considered an auspicious time to acquire assets.

Home loan rebate by HDFC Bank
Housing Development Finance Corporation (HDFC) and HDFC Bank have announced interest rates from 8.40 percent onwards as a part of their festive scheme, applicable till November 30, 2022. Borrowers with a credit score of at least 750 will be eligible for the low lending rate.

Home loan rebate by State Bank of India
The State Bank of India (SBI) has also issued discounts of up to 0.25 percent, 0.15 percent and 0.30 percent on home loans, top up loans, and loans against property, respectively. Further, SBI will offer new home loans and takeover loans starting at 8.40 percent, and home renovation and makeover loans from 8.80 percent. The bank will also waive off the home loan processing fee until January 31, 2023.

Home loan rebate by Bank of Maharashtra
As part of the Diwali Dhamaka scheme, the Pune based Bank of Maharashtra (BOM) has also decreased the interest rate on their home loans. Effective from October 17, 2022, home loans will be offered from eight percent, as opposed to 8.3 percent. The bank has also slashed personal loan interest rates from 11.35 percent to 8.9 percent in addition to waiving off the processing fee on their home, gold and car loans.

With lending rates regularly surging to curtail the rising prices, the offers are a welcome move from the lender community to prevent real estate and the allied industries from experiencing another slowdown after the pandemic.