HSBC, Yes Bank join rate cut war; slash home loan rates

HSBC on Friday reduced rates on its home loan products, offering mortgages at 6.45 per cent - one of the lowest in the industry - for balance transfers.

For fresh loans, the British lender's local branches will offer lending at 6.70 per cent, which is at par with sector leaders like SBI and HDFC.

Yes Bank also cut its rate to the same level in a review and is aiming for doubling the book size during the limited period offer.

Also Read: HDFC to offer home loans at 6.70% rate till Oct 31

Last month, private sector lender Kotak Mahindra Bank cut its interest rates to offer home loans from 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.

HSBC India said its rate has been reduced by 0.10 per cent to 6.45 per cent 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.

Home loans are generally considered safer bets because of the underlying security, and the waning of COVID infections has also prompted healthy pick-up in home buys.

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.

Also Read: Housing sales surge over two-fold in July-Sept, average prices up 3% across 7 cities: Anarock

"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 customers at 6.70 per cent.

Meanwhile, private sector lender Yes Bank also announced a cut in its offering to 6.70 per cent, as per a statement, which also said salaried women will get credit at 6.65 per cent.

"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.