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LIC Housing Finance Ltd (LIC HFL) reduced its Housing Prime Lending Rate (HPLR) by 25 basis points earlier this week, bringing it down to 8%. The move is set to lower the cost of borrowing for both existing and new home loan customers. This adjustment follows the Reserve Bank of India's decision to cut the repo rate by 25 basis points to 6%, prompting multiple lenders to pass on the benefits to customers. Several banks, including Canara Bank and Indian Bank, have also revised their home loan rates downward to below 8%, making home loans significantly more affordable.
The Housing Prime Lending Rate (HPLR) of LIC Housing Finance Ltd (LIC HFL) has been lowered by 25 basis points to 8% to increase accessibility to home loans. This revision, which came into effect earlier this week, is expected to ease the repayment burden for both existing and new borrowers. Advertisement
The HPLR serves as the base for determining the interest rates on all home loans provided by LIC HFL. By trimming the lending rate, the housing finance company aims to attract more homebuyers while also offering relief to its existing customers facing high borrowing costs.
This move closely follows the Reserve Bank of India's (RBI) monetary policy decision announced earlier this month, where the central bank lowered the repo rate by 25 basis points to 6%. The rate cut was intended to stimulate economic growth by encouraging banks and financial institutions to lend more aggressively.
Responding to the RBI's move, several lenders have also taken steps to make borrowing cheaper. Canara Bank revised its Repo Linked Lending Rate (RLLR) by 25 basis points, bringing its home loan rates down to 7.90% per annum. Similarly, Indian Bank also cut its home loan rates from 8.15% to 7.90% per annum. These developments mark a notable shift in the home loan market, where rates dipping below the 8% mark are becoming increasingly common.
Market experts believe that these rate cuts could provide a strong push to the real estate sector, especially in the affordable housing segment. With lower EMIs, potential homebuyers may find it easier to make purchase decisions, which in turn could help revive housing demand that has remained cautious in recent months.
In the past, LIC Housing Finance has periodically adjusted its lending rates to align with broader market trends and central bank policies. Such timely moves have helped the company maintain its competitive edge among housing finance institutions in India. The latest reduction is expected to reinforce its position further at a time when housing finance players are keen to capitalise on the improving sentiment in the residential market.
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