Home Finance Companies Rule Out Cuts in Lending Rates
HDFC and LIC Home Finance companies hiked the lending rates as a result of higher cost of funds. With the sliding rupee, the whole economy has been affected and to bridge the gaps the lending rates has to be hiked.
“Lending rates are solely the function of cost of funds. When it decreases it passes on to the customers and when it rise the customer has to suffer the same,” HDFC vice-chairman Keki Mistry said on an event.
The chief executive of LIC Housing Finance VK Sharma also expressed that the reduction of interest rates depends upon the costs of funds until it decrease the interest rates will not come down.
As the interest rates have increased the demand of loans have also dried up, and in the near future the rates are likely not to be lowered.
Additional tax benefit may attract some people to buy a property, Mistry added.
In Home loan segment, the budget has provided an additional benefit of Rs 1 Lakh, and above the property of 25 lakh the tax benefit will be Rs 1.5 lakh.
Rs 3,300 crore loans have been sanctioned in past 2.5 months, Sharma says.
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