Axis Bank reduces rates of home loans

Axis Bank reduces rates of home loans
Agencies Posted online: Saturday , October 06, 2007 at 1510 hrs IST

Mumbai, October 6: Private sector lender Axis Bank has reduced floating interest rates of home loans by 0.50 per cent for existing and future customers, a senior bank official said.

The industry practice was to acquire fresh customers by offering a lower rate on floating loans "but we want to maintain a parity between both our existing and future customers," Axis Bank's Assistant Vice-President Imtiaz Ahmed told PTI.

The rate has been brought down from 11 per cent to 10.5 per cent for both categories, he said, adding that the revised rate comes into effect from October 1.

The bank (formerly UTI Bank) has, however, not effected a change in its fixed home loans rate, which remains at 13 per cent.

"We have no immediate plans to have a re-look at our fixed rate," Ahmed said, adding that nearly 95 per cent of the bank's home loan customers were opting for floating rate.

"Our decision to lower rates on our floating home loans is a strategic decision," he said.

There has been a good growth in the bank's home loans portfolio and presently it constitutes 54 per cent of the total retail portfolio, he said.

"Every month, we are adding around Rs 300 crore by way of mortgage loans."

A clutch of banks have reduced their home loan rates in the last one month.

While some have offered reductions in view of the on-going festival season, others have done so to keep pace with competition.

Some of the leading banks that have lowered home loan rates are public sector Bank of Baroda, Union Bank of India, Canara Bank and IDBI Bank.