Gruh Finance increases home loan rates

The Ahmedabad-based Gruh Finance Ltd, a housing finance company operating in Gujarat and Maharashtra, has reviewed its lending rates on home loans following the caution given by the Reserve Bank of India (RBI) about the possible hardening of interest rates together with the downward bias in the estimates of GDP growth.

The leading players in the business of housing finance business have also raised interest rates on their home loan products up to 50 basis points.

According to a release issued by the company, Grush has decided to increase the lending rates on variable rate mortgages from the band of 7.25 per cent-8 per cent to 7.75 per cent to 8.25 per cent under the monthly rest option, with effect from September 6.

Gruh has also decided to offer the fixed rate mortgages in the range of 8.75 per cent to 9.25 per cent under monthly rest option.

"Gruh had discontinued to offer the fixed rate mortages for the last 18 months in view of the preference for variable rate mortgages by customers and most of the customers opting to convert their loans from fixed rate mortgages to variable rate mortgages.

However Gruh has decided to offer fixed rate option for home loans as well and Gruh shall also offer a one time option of converting the existing variable interest rate option to a fixed rate option on payment of conversion fee of 2.75 percent of the amount of principal being converted," said the release.