LIC Housing Finance has launched a new floating rate scheme under which it will offer home loans at 300-385 basis points below its prime lending rate (PLR).
Under the `Freedom` scheme, the housing finance company (HFC) will give home loans up Rs 30 lakh at the current PLR (13.75%) less 385 basis points, that is, at 9.90%. (100 basis points equals one percentage point.) Home loans above Rs 3 million and less than Rs 7.5 million will be available at PLR less 340 basis points, that is, 10.35%.
Loans above Rs 7.5 million and up to Rs 15 million will be available at PLR less 300 basis points, that is, 10.75%.
“This is a pure floating rate home loan product offering. We have also provided some embedded benefits such as allowing customers a one-time option within a year of obtaining the loan to convert to a fixed rate for the next five years, subject to terms and conditions,“ said V.K. Sharma, director & chief executive, LIC Housing Finance.
The HFC also announced the withdrawal of the Advantage-5 product, which was launched in July 2010.
Under this scheme, home loan rates were fixed at 9.25% for five years and thereafter they turned floating rate.