The Housing and Urban Development Corporation (HUDCO) cut the floating interest rates from 9.25 per cent to 8.00 per cent. On the cards for a while now, the HUDCO Board on Monday took the decision to revise interest rates to make itself more competitive in the housing loan sector and in the hope of increasing investment.This major reduction in interest rates will be applicable for housing for weaker section and for the Centrally sponsored action plan schemes, like Valmiki Ambedkar Awas Yjana (VAMBAY), 2 Million Housing Programme, Integrated low-cost and middle-income housing schemes and the Nirmal Bharat programme.‘‘Even the fixed rates of interest have been reduced from 10 per cent to 8.5 per cent for a repayment period of up to 15 years,’’ the Urban and Poverty Alleviation Bandaru Dattatreya. And the overall base for the floating rate of interest, has been reduced from 9.5 per cent to 8.5 per cent benefiting borrowers for all types of project from the public as well as private sector. One of the biggest beneficiary of the interest rate cut will be the State governments who have borrowed heavily from VAMBAY and other action plan programmes.In the private sector, the margin to base rate has also been reduced from 1.5 per cent to 1 per cent for 5 years repayment period and from 1.75 per cent to 1.5 per cent for a 15 years loan. Similarly, for fixed rate of interest, the reduction, ranges from 100 basis points to 150 basis points.With regard to interest rates for individuals under HUDCO Niwas scheme, the lending rates have been substantially reduced by 1.25 per cent across the board. Now, the loans for construction/purchase/extension of built houses as well as for purchase of plot would now be available at a floating rate of 8.25 per cent for a maximum period of 25 years against the existing rate of 9.5 per cent.‘‘The substantial reduction in the interest rates is likely to bring in more buoyancy in the housing and urban infrastructure market and also to growth of operations of HUDCO,’’ Dattatreya said.
