Shares of housing finance companies gained as much as 9.3 per cent after the RBI said that banks can now provide loans up to 90 per cent for properties that cost Rs. 30 lakh or below.
Consequently, GIC Housing Finance surged 9.24 per cent, Dewan Housing Finance Corporation gained 4.68 per cent, LIC Housing Finance was up 3.95 per cent and Housing Development Finance Corporation rose by 1.57 per cent on BSE.
Earlier, the facility was available only in cases where the cost was up to Rs. 20 lakh.
This will benefit those home seekers who plan to buy properties in the range of Rs. 20-30 lakh.
The RBI’s decision comes in the wake of all the major banks reducing interest rate on home loans.
The Reserve Bank through a circular said in the case of ‘individual housing loans’ falling under the loan category of up to Rs. 30 lakh, the LTV (Loan to Value) ratio is now up to 90 per cent.
For properties between Rs. 30 lakh and 75 lakh, the LTV is up to 80 per cent and for those above Rs. 75 lakh, the ratio comes in at 75 per cent.
