To attract more borrowers, mortgage major HDFC today launched the 'Fixed First' scheme under which interest rate for home loans will be fixed for three or five years and thereafter will attract floating rates.
The new scheme will provide an option to home loan seekers to borrow long-term funds at fixed rate of interest ranging from 10.75 per cent to 11.50 per cent for three or five years. On expiry of the fixed term, the loan will be switched to floating rate.
"To be eligible for this offer, customers should apply on or before December 31, 2011," HDFC said in a release.
ICICI Bank had last month launched a similar scheme, which is akin to teaser home loan rates.
RBI had expressed concerns over teaser rate schemes. HDFC further said loans of up to Rs 30 lakh will have a fixed interest rate of 10.75 per cent for three years period and 11.25 per cent for five years.
Similarly, loans in the range of Rs 30 lakh to Rs 75 lakh will have fixed interest rates of 11.25 per cent for three years period and 11.50 per cent for first five years.
The release said that loans of over Rs 75 lakh will attract an interest rate of 11.75 per cent for both the period.
Late last month, ICICI Bank had launched a similar fixed home loan schemes under which the rate of interest was fixed for one or two years. The borrower was required to shift to floating rate after the expiry of the fixed-term.
Earlier in the year, State Bank of India withdrew its teaser loan scheme.
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