appoint_raj

Hi !!
I have taken a flat in Today Homes, Noida. This project is approved by LICHF, AXIS, IDBI etc. I already have a approval from LICHF and have following doubts please suggest.
- Which Bank should i opt for Home Loan and why?
- LIC offers home loan on PLR basis, means PLR of 14.40 and discount of 3.60 so the interest rate would be 10.80 Floating Rate. My concern is as LICHF is govern by National Housing Bank and interest rates gets calculated by BPLR so i suspect when interest rate would come down they would also reduce the rate.
- Or should i go with axis bank which offers rate on base rate 10 and offers interest rate of 10.75 floating.
- does any one have an idea whether LICHF reduces their interest rate when it interest rate comes down.

manugnair

My advice is go for the base rate from banks as these have to be published and computed in line with RBI guidelines where as BPLR is computed directly by entities. Best is SBI if you can get loan from them

srvchetry

Please correct me if wrong.

For NBFC's like LICHFL, the spread discount is fixed. The PLR is reviewed every 3 months and as and when RBI guidelines change.The interest rate is PLR minus Spread. PLR is currently 14.40% for LIC and 16.5% for HDFC. Spread is 360 bps and 575 bps respectively.

For banks, base rate is changing as per RBI guidelines. But they have a margin over base rate, which is their individual decision. Say base rate is 10% and a mrgin of 0.75% is currently existing in SBI and Axis.

Now say RBI revises the guidelines below by 50 bps.
The revised interest would be:
LICHFL = (14.4 -0.5) - 3.60 = 10.30%
HDFC = (16.5 -0.5) - 5.75 = 10.25%
SBI/Axis= (10 - 0.5) + 0.75 = 10.25%

If this is correct then while deciding we have to have a clear understanding of PLR, spread and the margin.

I would be happy if someone guides me in understanding these terms.

Regards,
Saurav

deepOne

I'm also interested to know answer to above question