Did LIC Housing Finance Really Cut Lending Rates to 7.50% on New Home Loans?
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Synopsis
LIC Housing Finance has made a significant move by slashing interest rates on new home loans to 7.50%. This decision, effective from June 19, aims to boost housing demand and make home ownership more accessible, especially in the affordable and mid-income sectors. Discover how this impacts potential home buyers.
Key Takeaways
- LIC Housing Finance has cut interest rates to 7.50%.
- The rate reduction is effective from June 19.
- This move aligns with RBI’s policy direction.
- The adjustment aims to boost demand in the affordable housing sector.
- Other banks are also following suit with similar rate cuts.
Mumbai, June 21 (NationPress) LIC Housing Finance announced on Saturday a reduction of 50 basis points in the interest rates for new home loans.
With this adjustment, the starting interest rate for new home loan approvals is now 7.50 percent, effective June 19, coinciding with the company’s 36th Foundation Day.
This decision comes in the wake of the recent cuts to the repo rate announced by the RBI’s Monetary Policy Committee (MPC), as LIC HFL aims to pass on the benefits to new home loan customers, fostering home ownership and enhancing affordability.
“On our 36th Foundation Day, we reaffirm our commitment to making home ownership more attainable. This rate reduction aligns with the RBI’s policy direction and allows us to share the benefits with our clients,” stated Tribhuwan Adhikari, MD and CEO of LIC Housing Finance.
“We believe this adjustment will significantly stimulate housing demand, particularly in the affordable and mid-income sectors, where the desire for home ownership is closely linked to interest rates,” he added.
Earlier this week, the State Bank of India (SBI) also lowered its lending rate by 50 basis points following the Reserve Bank's policy rate cut. With this latest adjustment, SBI's Repo Linked Lending Rate (RLLR) now stands at 7.75 percent, reduced by the same amount.
SBI has similarly decreased its External Benchmark Based Lending Rate (EBLR) by 50 basis points to 8.15 percent, down from 8.65 percent. These new rates took effect from June 15.
In response to the RBI's actions, many banks have cut their lending rates. Notably, HDFC Bank has reduced its lending rate to offer a maximum interest rate of 6.6 percent per annum on Fixed Deposits for amounts less than Rs 3 crore for general customers.
Point of View
I recognize that LIC Housing Finance's decision to lower lending rates is a strategic response to the current economic climate influenced by the RBI's monetary policy. This move not only reflects their commitment to enhancing home ownership but also aligns with the broader industry trend of making housing more affordable. It’s crucial for potential buyers to stay informed as these changes can significantly impact their financial decisions.
NationPress
21/06/2025
Frequently Asked Questions
What is the new interest rate for LIC Housing Finance home loans?
The new interest rate for LIC Housing Finance home loans has been reduced to 7.50%.
When did the new lending rate take effect?
The new lending rate took effect on June 19.
Why did LIC Housing Finance reduce their lending rates?
The reduction follows the repo rate cuts announced by the RBI, aimed at promoting home ownership and improving affordability.
How does this affect housing demand?
The rate cut is expected to boost housing demand, particularly in the affordable and mid-income segments.
Are other banks also reducing their lending rates?
Yes, many banks, including SBI and HDFC Bank, have also lowered their lending rates following the RBI's policy adjustments.
