ICICI Bank cuts home loan rate by 0.3 per cent

New Delhi: Private sector player ICICI Bank today slashed home loan rate by up to 0.3 per cent for loans of up to Rs 30 lakh, bringing it in line with the country's largest lender SBI.

ICICI Bank said in a statement that it has reduced interest rates by up to 30 basis points for home loans up to Rs 30 lakh in its bid to boost affordable housing.

With this reduction, salaried borrowers can avail home loans at among the lowest rates in the industry, the country's largest private sector lender said. Salaried women borrowers will get home loans at 8.35 per cent and others at 8.40 per cent, it said.

Last week, State Bank of India had reduced its affordable home loan rates by up to 25 basis points, offering a lower rate of 8.35 per cent to new women borrowers. With around 26 per cent market share, SBI is also the biggest player in the home loan segment.

HDFC, the second- largest player in the space, offers loans at 8.65 per cent to women for loans up to Rs 75 lakh and 8.7 per cent for others. This move would be followed up by other lenders both in private and public sector space to stay in the competition.

With paring of rate, ICICI Bank said its customers taking home loans in the affordable segment will also have the option to select the type of interest rate.

In both these cases, the reduction in interest rates is 30 basis points from the previous rates. They can enjoy the benefit of floating interest rate or a fixed interest rate for the initial two/three years followed by floating rate.

"Further, borrowers can also choose to link their home loans with Marginal Cost of funds based Lending rate MCLR-6 Months or I-MCLR-1 Year. The bank is the first to offer such flexibility to customers. The reduced rate will be effective from May 15, 2017 for new borrowers," it said.

ICICI Bank MD Chanda Kochhar said the bank is committed to supporting the government's vision to provide housing for all by 2022.

"In line with this commitment, we have reduced the home loan interest rates for the affordable housing segment. With this announcement, customers of Economically Weaker Section (EWS) and Low Income Group (LIG) can avail the dual benefit of low interest rates from us and the Credit Linked Subsidy under the Pradhan Mantri Awas Yojana," she said.

This initiative, along with the bank's expansion of home loan business in tier II cities, will empower a larger section of customers to realise the dream of owning a new home, she added.