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HDFC launches fixed-cum-floating interest rate scheme

06 Sep 2011 Evaluate

At a time when interest rates appear to be peaking, lenders have started offering fixed-cum-floating interest rate home loan products. Housing finance major HDFC Ltd launched ‘Fixed First' – a fixed-cum-floating interest rate home loan product. Last month, ICICI Bank had introduced a similar product.

HDFC's scheme offers two options — the first where the fixed interest rate is available for the initial three years and the second where the fixed period is for the initial five years. Thereafter, the loan will switch automatically to HDFC's Adjustable Rate Home Loan (ARHL) product. The fixed rates of interest for the three-year option are 10.75 per cent on loans up to Rs 30 lakh, 11.25 per cent on loans of Rs 30-75 lakh and 11.75 per cent on loans over Rs 75 lakh. The fixed rates of interest for the five-year option are 11.25 per cent on loans up to Rs 30 lakh, 11.5 per cent on loans of Rs 30-75 lakh and 11.75 per cent on loans above Rs 75 lakh. The floating rates on the switch to floating rates based on current RPLR for loans up to Rs 30 lakh is 10.75 per cent, for loans of Rs 30-75 lakh it is 11 per cent and for loans above Rs 75 lakh it is 11.50 per cent.

Under the three-year option of the product, the fixed rate will be available up to November 30, 2014, while under the five-year option the fixed rate will be available up to November 30, 2016.The new product is in addition to all the existing home loan options being offered by HDFC. The scheme is available till October 31 and the first disbursement must be availed of on or before November 30.

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