MUMBAI (INDIA): Mortgage player Indiabulls Housing Finance has reduced its interest rates for existing borrowers on floating rates by 15 basis points, matching its offering with with that of the market leader HDFC.
“The new rates will vary according to a customer’s existing rate and the contract date and will effectively be in the range of 8.90 per cent on the lowest side and to 10.50 per cent on the higher side. Still most customers will get the benefit from February,” Indiabulls Housing Finance executive director Sachin Chaudhary told here.
The reduction will benefit all its existing home loan customers, including residents and NRIs/PIOs, he said, adding it comes on the heels of it reducing the rates for new women borrowers earlier this month by 45 bps.
Indiabulls vice-chairman and managing director Gagan Banga has attributed the reduction to a drop in the cost of funds in recent months “which has given us another opportunity to pass on the benefits to our existing customers.”
Indiabulls had earlier this month reduced the home loan rates by 45 bps to 8.65 percent for new women borrowers of up to 75 lakh and to 8.70 percent for others following a drop in the marginal cost of funds over the last few months.
Chaudhary said the rate cut follows a reduction in the marginal cost of its funds following the noteban which flooded the market with liquidity.
“Our average cost of funds has come down to 8-8.10 per cent post-noteban,” he said.
Chaudhary also said their cost to reach out to a customer has also come down following the launch of ‘e-home loan’ facility six months ago.
“The e-Home Loan is an industry-first end-to-end online home loans fulfilment platform which has helped us steadily bring down cost-to-income ratio and source incremental loan business. In Q3, as much as 18 per cent of our new customers came in through this platform,” he added.
When asked about the fund sources for the company he said 40 per cent each are bank loans and from markets especially bonds, and the rest come from ECBs or others.
On fund raising plans in the current quarter considering a likely spike in advances following interest cuts, he said that will hit the market next month or in March to meet rising credit demand, which in the third quarter rose 30 per cent, unimpacted by the note ban and expected to rise further.
Source: Press Trust of India