DHFL down 2% after it trims lending rate for new borrowers

Shares of Dewan Housing Finance Corporation Ltd (DHFL) fell over 2 per cent in trade on Thursday after the mortgage lender joined the rate cut war with bigger rivals by slashing its lending rate to 9.55 per cent to new borrowers for a limited period.

The stock hit its intraday low of Rs 218.65, down 2.54 per cent, on the Bombay Stock Exchange (BSE). The scrip settled at Rs 222.10, down 1 per cent.

The city-based pure-play mortgage lender lowered its retail prime lending rate by 0.20 per cent and also announced a 0.10 per cent cut to loans written till December 31, taking the effective lending rate down to 9.55 per cent for loans under Rs 25 lakh, a statement said.

This offering is at par with the country's largest lender SBI's minimum rate of lending for non-women borrowers which stands at 9.55 per cent, and better than the 9.65 per cent offered by rivals like HDFC, ICICI Bank and Axis Bank for non-women borrowers for smaller ticket sizes.

In the statement, DHFL said a bulk of its lending is to the low and middle income segment in smaller cities and the average loan size is under Rs 15 lakh.

Home loans are one of the safest bets in a gloomy economy which has affected credit quality at banks.

It is also one of the most competitive segments, with lenders trying to outdo each other by rate reductions and other benefits like cutting processing fees.

(With inputs from PTI)