Dena Bank slashes home loan interest rates

New Delhi: State-owned Dena Bank has cut interest rates on home loans above Rs 30 lakh to Rs 75 lakh by 5 basis points. Th ebank has reduced the interest rate by 10 basis points for loans above Rs 75 lakh.

Last week, India's largest lender State Bank of India had lowered interest rates by 10 basis points on home loans above Rs 75 lakh. The reduction in rates follows reduction in risk weight by the Reserve Bank.

For loans up to Rs 75 lakhs, the rate (marginal cost of funds based lending rate) is 8.60 per cent/ per annum. In the case of loans above Rs 75 lakhs, the new rate is MCLR + 0.10 bps or 8.70 per cent.

Dena Bank said it has passed on benefit of RBI's risk weight reduction to customers. In the second bi-monthly monetary policy review announced on June 7, RBI had reduced LTV (loan to value) ratios, risk weights and standard asset provisioning rate for individual housing loans for new customers.

 For housing loans above Rs 75 lakh, the central bank lowered the risk weight to 50 per cent, from the earlier 75 per cent. Realtors body CREDAI had said the RBI's decision to lower risk weightage on home loans would boost housing demand and help in overall growth of the real estate sector.