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Cheaper housing finance for NRIs

Larissa Fernand

While Indian investors are disappointed at the lowering of interest rates on the public provident fund and post office schemes by 1 per cent, non resident Indians can look forward to lower rates for property loans.

HDFC was the first to capitalise on this move by lowering housing finance rates soon after the cut in the small savings rates was announced by the government. ICICI followed in quick succession.

Since HDFC's NRI loans have slabs on the basis of tenure and not amount taken, it was more convenient to do an across the board lowering of interest rates, making all loans cheaper by 1 per cent.

Though ICICI had recently soft-launched its product for NRIs at 13 per cent, it immediately reacted after the HDFC cut by dropping its rates by 1 per cent. The only difference: ICICI has gone one step ahead and extended the facility to domestic residents too. Since NRIs are only offered loans for tenure up to five years, the rate of interest, whatever be the amount, is 12 per cent. Ditto for domestic residents. But, if the latter requests a longer tenure (he can go up to 15 years), then the rate of interest is 13.5 per cent up to Rs 10,00,000 and 14.5 per cent for higher amounts.

Most other players do not have separate rates for NRIs and resident Indians. And since there has been no move on the part of other housing finance players to reduce the rates for residents, as of now there has been no change in the housing finance scenario.

WHAT'S ON THE NRI PLATTER
Product	Player	Tenure	Earlier rate of Interest (% p.a.)	Current rate of Interest (% p.a.)
Housing Loans	HDFC	Upto 5 yrs	13	12
Housing Loans	ICICI	Upto 5 yrs	13	12
Housing Loans	HDFC	Upto 7 yrs	14	13
Home Improvement	HDFC	Upto 5 yrs	13	12
Land loans	HDFC	Upto 5 yrs	13	12

Personal finance

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