INDEX

Sr. No. Particulars Page No.

1. Home
2. Loan
3. Meaning of a Home Loan
4. Definition of 'Home Loan'
5. Types of Home Loan
6. Housing in India
7. Housing Finance in India
8. Impact of Sub-Prime Mortgage Crisis on Housing Sector
9. Housing Finance and Creation of Property
10. Housing Finance in National Perspective
11. Institutions in Housing Market and Housing Finance in India
12. Banks Providing Cheapest Home Loans in India
13. Home loan Interest rates from leading Primary Lending

Institutions in India
14. HDFC Ltd Home Loan
15. Features & Benefits of HDFC Ltd Home Loan
16. SBI Home Loan
17. SBI Home Loan Products:
18. Home Loan Base Rate November 2016
19. References

Home

Home is the most important human need, next only to food, clothing and shelter. Home is an
important facet of economic development; it is a basic need of a human being. It is a place where
everyone can relax after returning home from days tiring work. It is a place where everyone can
give time to his/her family and spend beautiful moments with family members. It is a
fundamental demand for living and one of the keys to peace and happiness. Every creature
yearns for a home. The first and the best training ground for human beings development of their
varied facilities is home. It constitutes a very significant part of the social and physical
environment where the individuals grow and mature as good citizens. It also plays an important
role in creating employment, maintaining health, social stability and preserving decent human
life.
Housing is a highly complex product. It is a bulky, durable and permanent product. It has fixed
location, being used only in the place where it is built. Once built, it 3 tends to remain in
existence for many years. The houses range from single family houses to many other types. But
housing is more than a complex product. It is both an economic and social process. It plays a
tremendous role in the economy. Housing has highly significant social implications because it
provides the shelter for our basic unit the family. Almost every person is affected in his day-to-
day living by the kind of house in which he lives.

In popular imagination a house is a building with a kitchen, a bathroom, bedroom and a lounge.
It will be built sturdily enough to withstand natural elements, and it will have an address on the
register of the post-office. Some of the housing in Indias largest cities fit this sort of description.
But many city dwellers do not live in such places. Some of the poorest are housed in space on a
pavement, near to their low-paid work. Others will have a roof, walls and a door, set in a
wasteland along river banks, close to railway lines, or in any place where there is a patch of land
available.

Home is the place where your parents live and where you grow up. Macmillan Dictionary

Loan

Loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial
assets over time, between the lender and the borrower. In a loan the borrower initially receives an
amount of money, called the principal amount, from the lender and is obligated to pay back on
repay an equal amount of money to the lender at a later time. The amount of money is paid back
in regular installments or partial repayments, on an annual basis, each installment being of the
same amount. There is no certainty about how the loans started, but one can easily assume that
ever since the concept of ownership came into existence, people have been practicing lending
and borrowing. Various forms of lending were found to be existing in ancient Greek and Roman
times and even the Bible mentioned monetary loan. However, the modern history of loan started
much later. In the history of loans the Indentured loan was one of the earliest forms of lending
which was practiced in the Middle Ages till the 19th century by the land owners and rich people
who allowed poor people in need of money to borrow in exchange of indentured servitude. The
borrowers had to work for several years to clear their debt
Meaning of a Home Loan

A sum of money borrowed from a financial institution or bank to purchase a house. Home loans
consist of an adjustable or fixed interest rate and payment terms. Home loans may also be
referred to as mortgage loans. Home loans, also known as mortgages, use the borrower's home
for collateral. This home can be a single-family house up to a four-unit property, as well as a
condominium or cooperative unit.

the terms home loan and housing finance inter changeably. Housing Finance plays a vital role
as an engine of equitable economic growth through the reduction of poverty and prevents slum
proliferation in economy. The demand for housing has increased rapidly day by day. Therefore,
to meet with the growing housing demand is the aim of the government. To achieve this aim it is
required to provide the finance for housing to the people. The liberalization of the financial
sector of the economy has also become possible by the housing finance.

Home Loan is the funds buyer has to borrow usually from a bank or other financial institutions
to purchase a property, generally secured, by a registered mortgage to the bank over the property
being purchased. A mortgage loan is a debt owed on a home, the mortgage rate is the interest rate
charged to the home owner for the use of the loan.

Definition of 'Home Loan'

As most people don't have the cash funds to pay for a home outright, they
can apply for a home loan which will pay the upfront costs for the home
which will have to be paid back monthly over a specified period of time.
Types of Home Loan

Various kinds of home loans are available in India. They are described below:-

1. Home Purchase Loan

These are the basic home loans for the purchase of a new home. These loans are given for
purchase of a new or already built flat/bungalow/row-house.

2. Home Improvement Loan

These loans are given for implementing repair works and renovations in a home that has already
been purchased by the customer. It may be requested for external works like structural repairs,
waterproofing or internal works like tiling and flooring, plumbing, electrical work, painting, etc.

3. Home Construction Loan

These loans are available for the construction of a new home. The documents required by the
banks or bank for granting customer a home construction loans are slightly different from the
home purchase loans. Depending upon the fact that when customer bought the land, the lending
party would or would not include the land cost as a component, to value the total cost of the
property.

4. Home Extension Loan

Home Extension Loans are given for expanding or extending an existing home. For example
addition of an extra room, etc. For this kind of loan, customer needs to have requisite approvals
from the relevant municipal corporation.

5. Land Purchase Loan

Land Purchase Loans are available for purchase of land for both home construction or
investment purposes. Therefore, customer can be granted this loan even if customer is not
planning to construct any building on it in the near future. However, customer has to complete
construction within tenure of three years on the same land.
6. Bridge Loan

Bridge Loans are designed for people who wish to sell the existing home and purchase another.
The bridge loan helps finance the new home, until a buyer is found for the old home.

7. Balance Transfer

Balance Transfer loans help customer to pay off an existing home loan and avail the option of a
loan with a lower rate of interest. Customer can transfer the balance of the existing home loan to
either the same banks or any another banks.

8. Stamp Duty Loan

These loans are sanctioned to pay the stamp duty amount that needs to be paid on the purchase of
property.

9. NRI Home Loan

This is a special home loan scheme for the Non-Resident Indians (NRI) who wish to build or buy
a home or land property in India. They are offered attractive housing finance plans with suitable
reimbursement options by many banks in the country.
Housing in India

As per CSO estimate almost 5% of GDP is contributed by the housing sector in next few years. It
is expected to rise to 6%, 16% of Indian workforce is engaged in the construction sector, more
over the construction sector has also been responsible for the development of over 250 ancillary
industries such as cement, steel, paints, bricks, etc. The construction industry ranks 3rd among
the 14 major sectors in the terms of direct, indirect and in dual effects in all sectors of the Indian
economy. A unit increase in expenditure in real estate sector can generate of five-fold increase in
income.

The figure given below depicts the relationship between the housing system and the entire
economy.

Housing System and the Entire Economy

The production-consumption economy is represented on the left hand side. And the informal
sectors are interlinked in various ways. Here, the intermediary roles of capital market and
government are crucial. Governments can provide housing sites and slum upgrading. By direct
provision, structurally, the capital market can be instituted. Also, housing can be used to enlarge
the flow of savings and Investments and some of the increased flow may be deployed into
housing. The reforms necessary for these are mortgage credit and, inducement to save and the
creation of National Housing Bank to activate the private sector and social housing supplies.The
right hand side of the figure shows the housing system which is linked to the intermediaries to
the production of consumption intermediaries; Housing is stratified on the basis of incomegroup
accessibility i.e. payment space for the poorest in some cities to luxury home ownership for high
income groups. Here we see the housing system as awhole. The most urgent problem as
especially in large cities is to reduce chronic demand supply gaps. This can be achieved by
establishing good intermediaries and by diverting a part of the saving investment flow into
housing in general and low income housing in particular.
Housing Finance in India

The Housing finance sector in India has no doubt, experienced unprecedented change in its
structure from its formulation stage. Indian Housing Finance has far moved from the stage of
being a solely government undertaking provided service during the 1970s to a very competitive
sector with more than 45 housing finance entities providing housing loans worth ` 7,81,000
million to home buyers across India.

The housing finance revolution in India can be divided into five distinct phases:

The first phase began before 1970 when the sole provider of any house building support was the
government of India through its various social schemes for public housing. The government
implemented these schemes through state housing boards which were responsible for allocating
serviced land and houses to individuals based on the principles of social equity.

The second phase starts with the establishment of the public housing company, Housing and
Urban Development Corporation (HUDCO). HUDCO was created to assist and promote housing
and urban development programs with government agency.HUDCO still plays an important role
in implementing government initiatives such as the ValmikiAmbedkarAwasYojna which was
launched by Government of India in 2001-02 to provide shelter or upgrade the existing shelter
for the people living below poverty line in the urban slums. Another important private player,
Housing Development Finance Company (HDFC) was established in 1977. HDFC pioneered in
individual lending, based on market principles. HDFC today is one of the largest home loan
providers of the country and its success displayed that financing homes can be a very profitable
business.
The third phase covers the decade of 1980s, which is marked by the establishment of the
countrys housing finance regulator - National Housing Bank in 1987. The era also involved the
government in directing various agencies like insurance companies, commercial banks (Under
priority lending requirements which allowed banks to allocate 1.5% of their incremental deposits
to housing under RBI guidelines.), provident funds and mutual funds to invest part of their
increment sources on housing. Two Insurance companies, LIC and GIC, started supporting the
sector both directly through their newly established housing finance companies and indirectly by
investing a proportion their net accretions in socially oriented schemes.

The fourth phase is the era after liberalization and is characterized by dramatic changes in
pricing of loans. Before 1994, the pricing of home loans were regulated by the NHB based on a
differential rates charged according to the size of the loan. This policy was amended in 1994 and
providers were free to charge market rates for the loans above 25,000. The fourth phase saw a
dominance of fixed interest rates, but variable rate offers started emerging at the end of the
decade.

The fifth Phase of rapid growth in the sector started after the millennium. Home loan
disbursements rapidly grew during the first few years of this phase. The lower interest rate
regime, rising disposable incomes, stable property prices and fiscal incentives made housing
finance an attractive business. Home loan disbursements grew to ` 7,68,191.90 million in 2005
from ` 1,47,012 million in 2001. The year 2003 witnessed an annual growth rate of 76% in loan
disbursements.
Impact of Sub-Prime Mortgage Crisis on Housing Sector in India

Global financial crisis was the result of subprime mortgage crisis which surfaced years ago in the
United State of America. During the boom years, brokers attracted by the big commissions,
encouraged buyers with poor credit worthiness to accept housing mortgages with little or no
down payment and without checks. Over a long period of time, the banks created easy credit
conditions through low interest rates and large inflow of foreign funds. Banks lent money on the
assumption that housing prices would continue to rise. Also, the real estate bubble
encouragedthedemand for houses as financial assets. Banks and financial institution later
repackaged these debts called CDOs or Collateralized Debt Obligations. In this way the risk was
passed on multifold through derivatives trade. This also led to failure of Lehman Brothers and
other giant financial corporates. The crisis that emerged in the US spread to other various
advanced economies quickly and at a later stage spread to developing economies through various
channels financial, trade and confidence despite their relatively sound macroeconomic
fundamentals and policy frameworks. It is considered by many economists to be the worst
financial crisis since the Great Depression of the 1930s.

1. Impact on the Real Estate Sector

a. Increase in prices of inputs due to inflation affecting all areas of economy like cement, steel,
etc.

b.Increase in home loan interest rate resulted into additional EMI burden on the borrowers.

c. Reduction in salaries and lay off results into reduced demand for real estate.

d. Demand-Supply imbalance

e. Reduction in commercial rents

f. Slowdown in infrastructure projects

g. Difficulties to raise funds

2. Price Reduction

a. Overall price cuts of 10 to 12 percent.

b. In Bangalore, DLF group reduced prices by 25 percent

c. In Thane, Lodha group cut prices by 30 percent.

d. In Mumbai (Lower Parel), Orbit group cut prices by 20 percent.

3. There were serious implications for banking sector as well. The sub-prime has meant that the
Indian banks have to follow stricter norms while disbursing loans to the peoples. These stricter
norms could prove to be counter cyclical. People asked to provide collateral will be denied a
loan.
Housing Finance and Creation of Property

The diagram shows the flow of saving from two classes of people the rich and the poor. If, the
rate of interest is lower, then the flow of savings can be diverted to housing which lead to
acquisition of wealth. For poor families a house may be the only mean acquired while for the
term of housing loan is longer and for rich it may be items in the asset portfolio. As the right-
hand side of the figure shows the net wealth for the poor and young households who borrow
heavily will be negative as they pay installments their assets will increase. Thus, housing acts as
a limited equalizer.

Housing Finance and Creation of Property

Structure of Housing Finance

Home is a dream of a person that shows the quality of efforts, sacrifices luxurious and above all
gathering funds little by little to afford individuals dream. Home is one of \the things that
everyone wants own. All the public, private, foreign, co-operative banks and financial
institutions provide home loans to the people who want to purchase a home through home loan.
The figure 1.5 given below shows the structure of housing finance in India.
Housing Finance in National Perspective

Housing sector plays an important role in the economic development of the country. Housing
finance is the single target force that drives the residential real estate in India. Today the decision
to buy a certain property largely depends on the amount of home loan one is comfortably able to
repay over a specific period of time. The general pattern of flow of housing funds in India is
shown in the figure below:

Flow of Housing Fund in India

The entire economy is divided into two dichotomous sectors, i.e., the formal sector and the
informal sector. In the formal sector one finds government as well as private institutions. The
Government institution included Life Insurance Corporation and General Insurance Corporation,
which channelize their housing related finance to HUDCO which in turn diverts it to public
housing programmes. In the private sector the HDFC is the link between the general capital
market and homeownership of HIG and MIG. The flow of funds into the housing sector is much
less compared to its demand. Also, the government programmes form less than 5% of the total
annual of housing allocation. Thus, the private sector seems to be dominant in India.The HDFC
mobilizes savings from the banks and other financial institutions but not from the household
directly, the reason being that it would be very costly to collect saving directly from the
household through network of local offices. The cost of advertising also would be heavy. In other
words, the HDFC is more like a wholesaler. It depends upon the bank for tapping the savings.
The HDFC funds come from public floats of capital and certificate of deposits in banks. It is
found that on an average a borrower repays about 25% of his income in installments. In some
cases loans are also provided to their employers who develop the scheme for the employees.
Since, the HDFC depends upon the free market funds, it has to function according to commercial
criterion. For this management must be of a high quality and the risk involved should be a
minimum. Therefore, the loans are given upon proof of income, a high value of collateral
security, personal guarantee and conservative pre-payment conditions. The social purpose is to
enlarge capital markets so that a vital range of income groups is served through a growing
proportion to housing.
Institutions in Housing Market and Housing Finance in India

A number of institutions have been instrumental in developing the housing finance market in
India. These mainly are the Central and State governments, RBI and NHB. The flow of credit to
housing sector and housing finance markets are also discussed in the section.

Government

The role of the Government in recent years has switched from that of a provider of housing units
to more of a market facilitator. The Five Years Plans starting from 1951 had assigned housing
sector a prominent place in the economy. The National Buildings Organization (NBO) was
established in 1954 under the Ministry of Housing and Urban Poverty Alleviation for technology
transfer, experimentation, development and dissemination of housing statistics. NBO was further
restructured in 1992 and 2006 with the revised mandate keeping in view the current requirements
under the National Housing Policy, and various socio-economic and statistical developments
connected with housing and building activities. The setting up of Housing and Urban
Development Corporation Ltd. (HUDCO) on April 25, 1970 to comprehensively deal with the
problems of growing housing shortages, rising number of slums and for fulfilling the pressing
needs of the economically weaker section of the society was one of the significant steps in the
series of initiatives taken by Government. The National Housing Policy was announced in 1988
which had a long term aim of eradicating houselessness, improving the conditions of the
inadequately housed and providing a minimum level of services/amenities to all. National
Housing bank was established in 1988 under an Act of the Parliament to function as a principal
agency to promote housing finance institutions and to provide financial and other support to such
institutions. The National Housing and Habitat Policy, 1998 was formulated after a thorough
review of the earlier policy. In 2007 another National Urban Housing and Habitat Policy was
formulated in view of the changing socio-economic parameters of the urban areas and growing
requirement of shelter and related infrastructure.

Reserve Bank of India

Asset prices are very important for monetary policy, because when bubbles, big or small, burst,
the cleaning up of the mess, is a long and unhappy experience. The Reserve Bank has initiated
several measures in the housing sectors. Commercial banks are required to lend 3 per cent of the
incremental deposits towards the priority sector, in which housing is an important component.
The Reserve Bank also includes investment made by banks in the Mortgage Backed Securities
(MBS) since 2004 as flow of credit to housing; assigning lower risk weight to housing and
benign interest rate environment has contributed to increase in housing loans. Growth in housing
loans has also been assisted by the comfort of relative safety of such assets given the tangible
nature of the primary security and the comfort obtained from the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002
and the amendment in December 2012.

National Housing Bank

National Housing Bank has been playing an important role in regulating and supervising the
housing finance companies. In recent years, especially since 2001, a number of new players have
entered the housing finance market with competitive offerings which have helped increase the
demand for housing loans. These housing finance companies/banks have been passing on the
benefit of lower cost of funds to customers. Most of these financing institutions, besides
simplifying the process of availing loans, have also introduced new products and variants
targeted at specific customer segments.

Other Institutions

The basic structure of land administration involves four main institutions. The Land Revenue
Department maintains the database for land records while the Department of Survey and Land
Records is responsible for maintaining spatial data, mapping and demarcating boundaries. The
Office of Stamp and Registration is responsible for collecting stamp duties on these transactions.
Local bodies maintain property tax registers.

Flow of Credit to Housing Sector

The need of long term finance for the housing sector in India is catered by scheduled
commercial banks (SCBs), financial institutions, cooperative banks, regional rural banks (RRBs),
Housing finance companies (HFCs), agriculture and rural development banks, non-banking
finance companies (NBFCs), micro finance institutions (MFIs), and self -help groups (SHGs).
The largest contributor to housing loans by virtue of their strong branch network and customer
base are SCBs, accounting for the major share of housing loan portfolio in the market followed
by HFCs.

Interest Rates

The interest rates charged on home loans could be fixed or floating. There is no uniform
reference rate for floating interest rates across the banks. In most banks, PLR of the bank is the
reference rate for the floating rate. In others, whenever there is a review of PLR and/or risk
weights, floating rate on housing loans is also reviewed. These rates could be reset based on the
cost of funds and repriced on a quarterly/semi-annual/ annual basis. In general, the rate of
interest is decided on the basis of cost of funds, operating expenses and profit margin.
Approximately, 80-90 per cent of outstanding housing loans are on floating rate basis, however
the range varies widely between banks from 60 per cent to 90 per cent, and some banks grant
loans to real estate only under floating rates.

In the case of fixed rate loans, generally, risk premium is added to the floating rate to cover the
market risk, depending on the tenure of the loan. Some banks simply determine the fixed rates
based on the prevailing floating rates and anticipated behaviour of the interest rates in near future
while others take into account the cost of funds, provisioning requirements and peg it at a level
where outflow is not affected by the revision. In most cases, fixed rate loans are not really
fixed and the rate is subject to resets, linking to the prevailing rates, at periodic intervals, e.g.,
every three or five year.
Banks Providing Cheapest Home Loans in India

1.Axis Bank

Axis Bank housing loans are intended for current requirements. One can choose between fixed
and floating rate options based on which way you think interest rates are moving.A loan in which
the interest rate does not change during the entire term of the loan is known as a fixed rate and a
floating interest rate is acknowledged as a changeable rate or adaptable rate.Axis bank is offering
2,212 as fixed rate and 2, 149 as floating rate for a period of 5 years. Alternatively for 10 years
fixed rate is 1,420 & floating rate is 1,349, for 15 years fixed rate is 1,184, floating rate is 1,105
and for 20 years fixed rate is 1,084, floating rate is 998.

2. Bank of Baroda

Bank of Baroda is offering 2,137as floating rate for a period of 5 years. Fixed rate is not
applicable in home loans by bank of Baroda. Alternatively for 10, 15 and 20 years floating rates
are 1,335, 1,090, and 982.The Home loan eligibility of the applicant is decided on the basis of
income and repayment ability. Additional factors such as age, qualification stability and
continuity of occupation etc also play an important role.Highest loan eligibility is restricted up to
36/48/54 times of gross monthly income based upon gross monthly income, i.e. 20000 more
than 20000 and up to 1.00 lakh and more than 1 lakh respectively.Moreover it is understood
that 40 percent to 60 percent of house hold income is necessary for nourishment purposes based
upon the total monthly earnings. Various additional reasons count repayment of the loan; hence
loan eligibility is also constrained as per repayment capacity.Bank of Baroda is offering 2,137as
floating rate for a period of 5 years. Fixed rate is not applicable in home loans by bank of
Baroda. Alternatively for 10, 15 and 20 years floating rates are 1,335, 1,090, and 982.

The Home loan eligibility of the applicant is decided on the basis of income and repayment
ability. Additional factors such as age, qualification stability and continuity of occupation etc
also play an important role.
3. Bank of Maharashtra

Bank of Maharashtra is offering 2,197 as fixed rate and 2,137 as floating rate for a period of 5
years. Alternatively for 10 years fixed rate is 1,432 & floating rate is 1,335, for 15 years fixed
rate is not applicable, floating rate is 1,090 and for 20 years fixed rate is 1 not applicable,
floating rate is 982.Salaried persons, professionals, businessmen with sufficient disposable
income, farmers having min five acres of irrigated land holding and Non Resident Indians are
eligible to apply for the loan. The age limit for salaried professionals is minimum 21 years -
maximum 50 years and maximum 55 years for other than salaried persons.

4. Canara Bank

Canara Bank is offering 2,137 as floating rate & fixed rate is not applicable for a period of 5
years. Alternatively for 10 years floating rate is 1,335, for 15 years fixed rate is not applicable,
floating rate is 1,090 and for 20 years fixed rate is 1 not applicable, floating.

Rate is 982. Salaried individuals, individuals engaged in business / professionals and self-
employed persons and NRIs are eligible to benefit loans without particular permission of RBI.
Persons more than the age of 55 years are also eligible subject to certain conditions of RBI.

The bank will finance up to 4 years of gross salary to salaried individuals, 4 years' gross yearly
income to businessmen or self-employed individuals. In case of NRIs up to 2 years' gross income
and selectively up to 3 years' gross income. The repayments are subject to terms and conditions
but generally in suitable calculated monthly instalments up to 25 years or borrow approaching
age of 70 years, whichever is earlier.

5. Central Bank of India

The fixed rate for home loan is not applicable for Central Bank of India. Other than that the bank
is offering 2,137 as floating for a period of 5 years. Alternatively for 10 years floating rate is
1,335, for 15 floating rate is 1,090 and for 20 years floating rate is 982.

Applicants applying for loan amount up to 10.00 lakhs must provide acceptable evidence of
adequate monthly/annual income. Income certificate issued by Tahsildar/Mandal Revenue
Officer/Revenue Department Officer having State level Gazetted rank is accepted by the bank for
sanction of housing loans up to 10.00 lakhs.

Terms and conditions of Guarantee are relinquished for salaried individuals irrespective of loan
amount. In case of self-employed or others for loans up to 20.000 lakhs, no guarantee is
necessary. In case amount of loan exceeds 10, 000 lakhs, the applicant should show Income Tax
Return for preceding two years as verification of income.
Home loan Interest rates from leading Primary Lending Institutions in India

Interest Rates for Home Loans are undoubtedly the most important parameter to factor into your
calculations. And in most cases interest rate is the decisive factor for an investor to narrow down
on a certain Primary Lending Institutions home loan offer. The interest on housing loans in India
is usually calculated on monthly reducing balance basis.

Comparative Chart on Home Loan Interest Rates on offer from few leading Primary Lending
Institutions is given below for the benefit of general public:

Home loan interest rate (20 year loan) as on 25thApril, 2012*

Home Loan Interest Rate(Below 20 lakhs)

Reset
clause
Fixed(for Current
Fixed(with after Markup/Markdown
Primary Lending the Benchmark
Floating reset how to Benchmark
Institutions entire Rate (for
clause) many Rates
tenure) floating)
month
s
Allahabad Bank 12.75% 12.25% NA NA 10.75% BR: 10.2%
Andhra Bank BR + NA NA NA 14.25% NA
1.25%
Axis Bank 11% 11.75% NA NA NA BR-10%
Bank of India 11% NA NA NA 14.25% NA
DHFL Vyasa Housing 13.50% NA 10.75 12 18.25% NA
Finance
GIC Housing Finance 12.50% NA NA NA NA NA
Gruh Finance Limited 10.75- 11.75- 10.75- Linked 16.25 Varied
16% 17.00% 15.75% to the
GPLR
HDFC Ltd. 10.75% 16.75% 10.75% 36 18.50% BR 10%
HSBC Bank 11-13% 11-14% 13.25-15% 36 NA NA
HUDCO 10.50- Floating 13.25-15% 36 - -
 14.00% + 1.00%
ICICI Home Finance 10.50% 14.50% Base+0.5% 24 17.75% -
Co. Ltd.
IDBI Home Finance 11.00% NA 12.25- 36-60 15.25% BR 10.75%
Ltd. 13.25%
India Infoline 12.5% NA NA NA 16.25% Dependent on
Housing Finance Ltd. individual rating of
each customer,
amount of loan,
tenure, CIBIL scores
etc.
Indiabullls Housing NA NA NA NA 17% Markup NA
Finance Ltd. Markdown 5.5% ( 14
-8.5 =5.5)
Karnataka Bank 11.75- NA NA NA 15.75% BR:15.50%
14.75%
LIC Housing Finance 10.8% NA 12.15% 60 14.65% 2.50%
Manipal Housing linked to NA NA NA 15.25% NA
Finance Syndicate PLR
Limited
Micro Housing 12-15% NA NA NA 14% 1-4%
Finance Corporation
National Trust Rural NA NA NA 15.75% -
Housing Finance Ltd -11% -
13%
General
14.5%
-17.75%
Orange City Housing NA 10 50%* NA NA NA NA
Finance Ltd. (ROI 10-
14% for
home
loans)
PNB Housing 11.75% NA 14.00% 36 14.25% BR:10.75%
Finance Ltd.
Reliance Home 12.75% NA NA NA 17.75% 5.50%
Finance Private
Limited
Repco Home Finance 12.50% NA NA NA 16.00% 3.25%
Ltd.
Rose Valley Housing 11.50% NA NA% -- --- NA
Development Finance
Corporation Ltd.
State Bank of India 10.50% NA 9.75-12% 12 NA BR:10%
(SBI)
Sundaram BNP 12- - - - 15.50% 3%
Paribas Home 14.25%
Finance Ltd.
Union Bank of India 11.75% NA NA NA 15.75% NA
HDFC Ltd Home Loan

HDFC Ltd home loans available at affordable interest rates, lowest EMI, High Eligibility & low
processing charges with easy procedure of home loan. HDFC Ltd is the biggest private lender in
home loan segment with over 5.1 million home loan customers. HDFC Ltd extensive distribution
network of 378 interconnected offices (including 103 offices of HDFC Sales) with outreach
programs to several locations, reaching out to over 2,400 towns and cities all over India.

Why to Choose HDFC Ltd for Home Loans:

24.13% of Homes are financed by HDFC Ltd. 2nd largest Home loan institution.
Lakhs of Flat, row house, bungalow from private developers in approved projects.
Finance Available for Properties from Development Authorities such as DDA, MHADA etc.
Attractive & lowest interest rates which cuts your emi to maximum level.
Home Loan Book of Over 2.54 Lakh crore that grew by 23% in 2014-2015.
Average home loan size of 23.3 Lakh, Loan to value ratio stands at 66%.

Per Lac EMI on HDFC Ltd Home Loan as Follows:

Interest Rate Women (Per Lakh EMI for 30 Years) Men (Per Lakh EMI for 30 Years)
9.55% Rs.845
9.55% Rs.845

Who Can Apply for HDFC Ltd Home Loans?

You can apply individually or jointly for HDFC Ltd Home Loans. All proposed owners of the
property will have to be co-applicants. However, all co-applicants need not be co-owners.
Generally co-applicants are close family members.
HDFC Ltd Home Loan Interest Rates 2015: (Last updated on 22 October 2015)

Adjustable Rate Loan - Festive Offer

RPLR: 16.30%

Interest Rates (%p.a.) RPLR Minus Spread

 Loan Slab

Any Loan Amount 9.55 - 10.05 RPLR - (6.75 to 6.25)

TruFixedPlus Loan 2 & 3 Year Fixed Rate Variant - Festive Offer

Adjustable Rate Loan

RPLR: 16.30%

Interest Rates during Post the Fixed Rate Term the applicable Interest
the 2 & 3 Year Fixed Rates shall be the prevailing Rate of Interest under
Loan Slab
Rate Term (% p.a.) Adjustable Rate

Any Loan
9.55 - 10.05 RPLR - (6.75 to 6.25)
Amount

TruFixed Plus Loan 10 Year Fixed Rate Variant - Festive Offer

RPLR: 16.30%

Post The Fixed Rate Term The Applicable

Interest Rates During The 10 Year
Interest Rates Shall Be The Prevailing Rate
Loan Slab Fixed Rate Term(% p.a.)
Of Interest Under Adjustable Rate

Any Loan 9.75 - 10.25 RPLR (6.55 to 6.05)

Amount

The special interest rate is available for customers who apply for loan on or before November 30,
2015 and avail of their first disbursement on or before December 31, 2015. This is a limited
period offer under the Adjustable Rate Home Loan and is Subject to change. All loans at the sole
discretion of HDFC Ltd. Terms and Conditions apply
Trends of last 5 Years HDFC Home loans vs RBI Repo rate
Date Change by RBI in New Repo Rate Date New Base Rate of
Rate Cut HDFC Ltd
29 Sep 2015 (-).50% 6.75% 06-Oct- 9.60%
15
4-Mar-15 0.25%- 7.50% 13-Apr- 9.85%
15
15-Jan-15 0.25%- 7.75%

28-Jan-14 0.25% + 8.00%

29-Oct-13 0.25% + 7.75% 2-Nov- 10.00%

13
20-Sep-13 0.25% + 7.50% 3-Aug- 9.80%
13
3-May-13 0.25% - 7.25%

19-Mar-13 0.25% - 7.50% 30-Mar- 9.60%

13
29-Jan-13 0.25% - 7.75% 31-Dec- 9.70%
12
17-Apr-12 0.50% - 8.00% 30-jun- 9.80%
12
25-Oct-11 0.25% + 8.50% 13-Aug- 10.00%
11
16-Sep-11 0.25% + 8.25%

26-Jul-11 1.25% + 8.00% 12-Jul- 9.50%

11
25-Jan-11 6.50% 1-Jan- 7.75%
11
Features & Benefits of HDFC Ltd Home Loan
Attractive Home Loan Rates.
Options from Fixed Rate or Floating Rate are available.
Maximum funding upto 80% of the cost of the property.
Easy repayment options.
Free & safe Document storage
Loan Approval even before a property is selected.
Flexible repayment options to suit your individual needs.

*Zero Processing Fees for Salaried and Self Employed Professionals when you shift your
Home Loan to HDFC.

#Attractive Interest Rates at 9.85% p.a. onwards. **Top-Up Loan also available. Loan
Tenure of 30 years.

Applicable for people who apply with HDFC on or before September 30, 2015 and avail of the
first disbursement on or before November 30, 2015.

Documentation required for HDFC Ltd Home Loan

Salaried Self Employed Professionals Self Employed Businessman
Customers
Application form Application form with photograph Application form with photograph
with photograph
Identity and Identity and Residence Proof Identity and Residence Proof
Residence Proof
Latest Salary-slip Education Qualifications Education Qualifications
Certificate and Proof of business Certificate and Proof of business
existence existence
Form 16 Last 3 years Income Tax returns Business profile
(self and business)
Last 6 months bank Last 3 years Profit /Loss and Last 3 years Income Tax returns
statements Balance Sheet (self and business)
Last 3 years Profit /Loss and
Balance Sheet
 Processing fee Last 6 months bank statements Last 6 months bank statements
cheque Processing fee cheque (self and business)
Processing fee cheque

Loan Term

The maximum period of repayment of a loan shall be up to 30 years for the Telescopic
Repayment Option under the Adjustable Rate Home Loan. For all other Home Loan
products, the maximum repayment period shall be up to 20 years.

The tenure of the loan is also dependent on the customers profile, age of customer at
maturity of loan, age of property at loan maturity, depending upon the specific repayment
scheme as may be opted and any other terms which may be applicable based on prevalent
norms of HDFC.

Maximam Loan Amount you can get for buy a home

Loan Amount Maximum Funding* or avail loan amount

Up to INR 75 Lacs 80% of the property value

Above INR 75 Lacs 75% of the property value

*Subject to Market value of the porperty and replacement capacity of the customer, as
assessed by HDFC.

Types of Home Loans available at HDFC Ltd

Adjustable Rate Home Loan

A Home Loan under the Adjustable Rate is linked to HDFC's Retail Prime Lending Rate
(RPLR). If there is a change in our RPLR, the interest rate on your loan will be revised once in
three months depending on the date of your first disbursement with or without a change in EMI.
If the interest rate increases, the interest component in an EMI will increase and the principal
component will reduce resulting usually in an extension of term of the loan, and vice versa when
the interest rate decreases.
TruFixed Plus Home Loan 2 Year Fixed Rate Variant

A TruFixedPlus Home Loan offers you a part fixed rate term and a part adjustable rate term.
Under this variant of the TruFixedPlus Home Loan, you can avail of a fixed rate for a maximum
term of 2 years, post which the loan will automatically convert to an adjustable rate, adding up to
a total term of 20 years.

TruFixed Plus Home Loan 3 Year Fixed Rate Variant

A TruFixedPlus Home Loan offers you a part fixed rate term and a part adjustable rate term.
Under this variant of the TruFixedPlus Home Loan, you can avail of a fixed rate for a maximum
term of 3 years, post which the loan will automatically convert to an adjustable rate, adding up to
a total term of 20 years.

You can Repayhdfc ltd home loan through 5 different ways:

1. Step Up Repayment Facility (SURF) In this method if your income increased your emi
will also increase.

2. Flexible Loan Installments Plan (FLIP) In this method you can alter or change the emi
according to your repayment capacity during the term of loan.

3. Tranche Based EMI - If you purchase an under construction property you are generally
required to service only the interest on the loan amount drawn till the final disbursement
of the loan and pay EMIs thereafter.

4. Accelerated Repayment Scheme - provides you the flexibility to increase the EMIs every
year in proportion to the increase in your income.

5. Telescopic Repayment Option Longer Repayment options of 30 years.

Processing Fees
Up to 0.50% of the loan amount or Rs.2,000 whichever is higher, plus applicable taxes.

Prepayment Charges
Nil - Dual Rate Home Loans [DRHL] / Fixed First Home Loans / TruFixed Rate Home Loans /
TruFixed Plus Home Loans / TruFixed Plus Home Loans 2 & 3 Year Fixed Rate Variants
The following options of conversion are available to an existing customer of HDFC:

1. Switch To A Lower Interest Rate In The Adjustable Interest Rate Option:

HDFC offers you an option to convert your existing adjustable rate to HDFC's current
adjustable rate by effectuating a change in the spread as indicated in the loan agreement.
In case of a partly disbursed loan, the fee payable to avail the conversion shall be 0.50%
plus applicable taxes of the principal outstanding plus the undisbursed loan amount or
Rs.50,000 plus applicable taxes, whichever is lower.

In case of a fully disbursed loan, the fee payable to avail the conversion shall be 0.50%
plus applicable taxes of the principal outstanding or Rs.50,000 plus applicable taxes,
whichever is lower.

2. Switch From Fixed Interest Rate Option To The Adjustable Interest Rate Option:

HDFC offers you an option to convert from a Fixed Interest Rate Option to the
Adjustable Interest Rate Option for the balance term of the loan.
In case of a partly disbursed loan, the fee payable to avail the conversion shall be 0.50%
plus applicable taxes of the principal outstanding plus the undisbursed loan amount or
Rs.50,000 plus applicable taxes, whichever is lower

In case of a fully disbursed loan, the fee payable to avail the conversion shall be 0.50%
plus applicable taxes of the principal outstanding or Rs.50,000 plus applicable taxes,
whichever is lower.

3. Switch To A Lower Interest Rate In A Dual Rate Home Loan Option:

 HDFC offers you an option to convert your existing rate to HDFC's current rate.
In case of a partly disbursed case the fees payable to avail such change shall be 0.50%
plus applicable taxes of the principal outstanding plus the undisbursed amount or
Rs.50,000 plus applicable taxes, whichever is lower.

In case of a fully disbursed loan, the fee payable to avail such change shall be 0.50% plus
applicable taxes of the principal outstanding or Rs.50,000 plus applicable taxes,
whichever is lower.

3. Switch From TruFixed Home Loan Product (During The Period Of Initial Rate Of
Interest) To The Adjustable Interest Rate Option:

Under this product, during the fixed tenor, you have the option to convert to an adjustable
rate product on payment of an upfront conversion fee of 1.75% of the principal
outstanding plus the undisbursed amount plus applicable taxes.

4. Switch From TruFixed Plus Home Loan Product (During The Period Of Initial Rate
Of Interest) To The Adjustable Interest Rate Option:

Under this product, during the fixed tenor, you have the option to convert to an adjustable
rate product on payment of an upfront conversion fee of 1.75% of the principal
outstanding plus the undisbursed amount plus applicable taxes.

5. Switch From Existing Adjustable Interest Rate Option To Fixed Interest Rate
Option Under The TruFixed Plus Home Loan Option:

Under this product, you have the option to convert an existing adjustable rate product to a
fixed rate under the TruFixed Plus rate product on payment of an upfront conversion fee
of 1.75% of the principal outstanding plus the undisbursed amount plus applicable taxes.

SBI Home Loan

The most favored Home Loan provider-SBI Bank offers Home Loan with attractive interest rates
along with Latest Schemes and Benefits. SBI also provides a Housing loan with different
schemes - SBI Easy Home Loan, Advantage Home Loan, SBI Home Plus, Her home loan for
women.

SBI is the largest lender in home loan category of India with Above 25.6% of market Share. As
per consolidated report SBI has total income of Rs. 257289.51 Crore as on on 31- March 2015.
SBI has total assets of above Rs.2529394.00 Crore. SBI has more than 16000 branches in India
including 190 in other countries. SBI already have tie up with GE for Credit card. SBI is the only
Indian bank which is ranked under 500 list of Forbes. SBI is the most searched bank in India.
With a base of 16000+ branches SBI is accessible from most of the places in India.

Why to apply with SBI for home Loans?

Biggest Home Loan lender with 27.8% Market Share.

Lowest Interest Rates of 9.50% - 9.55%.
Lowest EMI Per lac Rs.841 - Rs.844.
No prepayment penalties, No Hidden charges, Low Processing Fees.
Network of More than 16000 Branches & 5 Associate Banks.
Indias largest Bank, Good presence in All India Rural, Tier-II & Tier III.
Home Loan Book Stood at 1.69 lakh crore at the end of September 30'2015
Trends of last 5 Years SBI Home loans vs RBI Repo rate
Date Change by RBI in New Repo Rate Date New Base Rate of SBI
Rate Cut
29-Sept-15 0.50% - 6.75% 29- 9.30%
Sept-
15
2-Jun-15 0.25%- 7.25% 8- 9.70%
June-
15
4-Mar-15 0.25%- 7.50% 7- 9.85%
Apr-
15
15-Jan-15 0.25%- 7.75%

28-Jan-14 0.25% + 8.00%

29-Oct-13 0.25% + 7.75% 7- 10.00%

Nov-
13
20-Sep-13 0.25% + 7.50% 19- 9.80%
Sep-
13
3-May-13 0.25% - 7.25%

19-Mar-13 0.25% - 7.50%

29-Jan-13 0.25% - 7.75% 4- 9.70%

Feb-
13
17-Apr-12 0.50% - 8.00% 20- 9.75%
Sep-
12
25-Oct-11 0.25% + 8.50% 13- 10.00%
Aug-
11
16-Sep-11 0.25% + 8.25%
 26-Jul-11 1.25% + 8.00% 11- 9.50%
Jul-11
25-Jan-11 6.50% 14- 8.25%
Feb-
11

Eligibility Criteria, Documentation required for SBI Home Loan

Salaried Self employed

Age 18 years to 70years 21 years to 70years

Income Rs.1,20,000 (p.a.) Rs.2,00,000 (p.a.)

Loan Amount 5,00,000 - 1,00,00000 5,00,000 - 2,00,00000

Offered
Tenure 5years-20years 5years-20years

Current 2years 3years

Experience
Documentation 1) Application form with
photograph
2) Identity & residence proof
3) Last 3 months salary slip
4) Form 16
5) Last 6 months bank
salaried credit statements
6) Processing fee cheque
1) Application form with photograph
2) Identity & residence proof
3) Education qualifications certificate
&proof of business existence
4) Business profile,
5) Last 3 years profit/loss & balance
sheet
6) Last 6 months bank statements
7) Processing fee cheque
SBI Home Loan Products:

SBI MAXGAIN - Home loan as an Overdraft

The loan is sanctioned as an Overdraft with added flexibility to operate the Home Loan Account
like SB or Current Account. Bank also provides Cheque Book/Net Banking facility for the
purpose.
Minimum Loan amount under Maxi Gain Home Loan- Rs.20 lacs
Maximum Loan amount sanctioned under Maxgain Home Loan - No Cap

Interest Rates charged on Maxgain Home Loan by State Bank of India:

Maxgain above Rs. 1 crore - 9.75% p.a. (Female Borrowers), 9.80% (Other borrowers)

SBI YUVA Home Loan - A Special scheme for Youth

Under Yuva Home loan scheme bank provide 20% higher loan amount than that of normal home
loan to employees of Private sector companies, MNCs, govt companies, PSUs &govt employees.
Eligibility Criteria for Yuva Home Loan:
Age between 21 years to 45 years
Minimum Per month income should be Rs.3000/-
In first 36 Months/ 3 years only interest applied on home loan is payable. Regular EMI starts
after completion of 3 Years.

SBI Realty Home Loan - For Purchase of Plot for construction

SBI offers this loan to purchase a plot for construction of house. Construction of house should
commence within 2 years from the date of availment of SBI Realty Loan.
Maximum loan amount a borrower can get Rs.10 crores.
Maximum Repayment period under Realty Home loan is 15 Years.
SBI Pal or SBI Pre Approved Home Loan

SBI PAL provides sanction of Home Loan limits to the customers before finalization of the
property which enables them to negotiate with the Builder/Seller confidently.
The loan eligibility will be assessed on the basis of income details of the applicant.
Non-refundable processing fee as applicable to the Home Loan will be collected at the time of
sanction.
Pre-approved loan arrangement letter (PLAL) will be valid for a period of 4 months. Property
papers will be required to be submitted by the borrower within the validity of PLAL. Processing
fee will not be levied again.
Under Pre Approved Home Loan Scheme Minimum Loan amount: Rs.10 Lacs.

SBI TOP UP HOME LOAN

Under this scheme all borrowers who paid home loans with a satisfactory repayment track of at
least one year are eligible.
Minimum Top-up Loan is Rs.3 Lac& Maximum is Rs.5 Crore.
Processing Fees: 0.35% of Loan Amount subject to a minimum of Rs 1500/- and Maximum of
Rs 10,000/-
Interest Rates charged on Top-up loan is different from Normal Home Loan
Top-up loan amount Term Loan Loan Overdraft
UptoRs. 50 lacs 10.20% 10.45%
Above Rs. 50 lacs&UptoRs. 2 crores 10.45% 10.70%
Above Rs. 2 crs&uptoRs. 5 crores 10.95% 11.20%

Disbursement of SBI Home Loan

The loan will be disbursed only on the following conditions:

1. All the security documents prescribed have been executed by borrower/co-applicant (s)/
guarantor/s
2. A valid mortgage (equitable or registered if equitable mortgage is not possible) has been
created in favour of the Bank as per the laws of the State.
3. Wherever creation of mortgage is likely to be delayed for any valid reason, suitable security
including third party guarantee, has been taken for the interim period.
4. The loan will be disbursed in stages where a loan for construction is desired or purchase is
through payment to seller in installments.
5. All necessary statutory compliances are in place.
SBI may disburse the quantum of loan in lump sum or in installments at its own discretion
depending on the level of construction of the House/Flat as acceptable to SBI.
SBI will disburse loan amount directly to the builder/seller/society as the case may be and as
requested / specified/ directed by the customer to SBI at the time of each disbursement. SBI shall
not be responsible / liable in any manner whatsoever for any delay by the customer in providing
such request/ specification/ direction to SBI and the customer shall not claim any costs, charges
and expenses in any relation to any non-disbursal by SBI due to any such delay by the customer.
The Bank reserves the right to collect any tax if levied by the State/Central Government and/or
other Authorities in respect of this transaction.
 HOME LOAN BASE RATE (HISTORICAL DATA) NOVEMBER 2016

Reduced Base Previous Current

Rate Basis Base Rate Base Rate Effective
Bank Name Points (bps) (%) (%) Date From

State Bank of
India (SBI) 40 9.7 9.3 29.09.2015 05.10.2015

Andhra Bank 25 9.95 9.7 29.09.2015 05.10.2015

Punjab National
Bank (PNB) 40 10 9.6 30.09.2015 01.10.2015

Axis Bank 35 9.85 9.5 30.09.2015 05.10.2015

Oriental Bank of
Commerce (OBC) 209. 9.9 9.7 30.09.2015 05.10.2015

Bank of Baroda 25 9.9 9.65 30.09.2015 05.10.2015

IDBI Bank 25 10.0 9.75 30.09.2015 05.10.2015

ICICI Bank 35 9.70 9.35 01.10.2015 05.10.2015

Kotak Mahindra
Bank 25 9.75 9.5 01.10.2015 05.10.2015

Yes Bank 25 10.50 10.25 01.10.2015 05.10.2015

State Bank of
Travancore 25 10.15 9.95 01.10.2015 05.10.2015

State Bank of
Bikaner and
Jaipur 25 9.95 9.7 01.10.2015 05.10.2015

Central Bank of
India 25 9.95 9.7 01.10.2015 08.10.2015
Allahabad Bank 25 9.95 9.7 01.10.2015 05.10.2015

Bank of India 25 9.95 9.7 05.10.2015

UcO Bank 25 9.95 9.7 05.10.2015

Syndicate Bank 30 10.00 9.7 05.10.2015

Dena Bank 30 10.00 9.7 05.10.2015

Bank of
Maharashtra 30 10.00 9.7 05.10.2015

Karnataka Bank 25 10.50 10.25 05.10.2015

Union Bank of
India 25 9.90 9.65 05.10.2015

05.10.201
HDFC Ltd. 25 9.90 9.65 5 06.10.2015

06.10.201
Indian Bank 30 9.95 9.65 5 07.10.2015
References

https://en.wikipedia.org/wiki/Home
https://en.wikipedia.org/wiki/Loan
https://en.wikipedia.org/wiki/Home_equity_loan
https://www.hdfcbank.com/personal/products/loans/home-loan
https://www.sbi.co.in/portal/web/interest-rates/home-loans-interest-rates
https://www.sbi.co.in/portal/web/personal-banking/home-loans
https://en.wikipedia.org/wiki/Housing_Development_Finance_Corporation
http://www.deal4loans.com/hdfc-ltd-home-loan.php
https://www.bankbazaar.com/hdfc-home-loan.html
https://www.google.co.in/?gws_rd=ssl#q=housing+loan+pdf