Mumbai, Jan 20: The housing subsidiary of ICICI, ICICI Home Finance Company Limited (ICICI Home Fin) has taken the initiative of reducing interest rates on housing loans by creating a new five-year slab at a n interest rate of 12 per cent, irrespective of the quantum of loan. This is the lowest maturity slab in the home loan segment. There have been home loans available at 12 per cent for smaller amounts like Rs 25,000.The ICICI move to reduce the interest rates on housing loans follows the recent Central government announcement of reduction in interest rates on public provident fund (PPF) and other small savings instrument last week which has paved the path for a low interest rate regime. Incidentally, ICICI also cut its lending rates to 12.5 per cent across all maturities.
"ICICI Home Finance has introduced a new option to the customer and this follows the international model of lower interest rates for shorter duration. All loans having a five-year maturity, irrespective of whether or not the customer is a resident Indian or a non-resident will be offered at 12 per cent," the housing finance subsidiary's business head (mortgages), Atul Jog, said.
ICICI Home Fin has also decided to waive the two per cent pre-payment penalty charges on home finance loans to customers who are part paying or fully repaying their loans before maturity.
In terms of industry standards this marks a departure from traditional norms, the release said.
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