HSBC cuts home loan rate to 6.7%

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United Kingdom-based multinational bank HSBC on Friday reduced rates on its home loan balance tranfers to 6.45% – one of the lowest in the industry. For fresh loans, the British lender’s local branches will offer lending at 6.70%, which is at par with sector leaders like SBI and HDFC.

Meanwhile, private sector lender Yes Bank also announce a cut in its offering to 6.70%, as per a statement, which also said salaried women will get credit at 6.65%. “Given our focus on further building the retail book, home loan is segment we are looking at expanding and envisage growing the book size by 2X over the next three months,” its chief executive and managing director Prashant Kumar said.

In September, private sector lender Kotak Mahindra Bank cut its home loan interest rates starting at 6.50 per cent onwards, forcing others to also review their rates. Credit growth is at low levels amid a flush of liquidity which is leading to the rate cuts.

No precessing fee

HSBC India said its rate has been reduced by 0.10% to 6.45% for balance transfers, wherein existing borrowers being served by rivals are enticed to switch the remaining loan amounts to a newer lender by aggressive offerings.

In a statement, the bank said it has also waived the processing fee for these loans and added that the rate offering will be applicable only till December 31.

“We believe this reduction in the home loans rates will help reduce the interest burden of customers and make homeownership more affordable,” its head of wealth and personal banking, Raghujit Narula said. The bank currently offers home loans of up to Rs 30 crore to all customer at 6.70%.