LIC Housing Finance’s ‘Freedom’ from rate worries?
LIC Housing Finance new home loan product Freedom provides customers with a one-time option within one year of obtaining the loan to convert to a fixed rate for the next five years, subject to terms and conditions.
The ever-rising interest rates have not only hurt the sales of new homes but also the borrowers who are wondering when the rates would peak out. Under these conditions having a home loan product which allows switching to a fixed rate scheme definitely comes handy.
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LIC Housing Finance’s Freedom scheme was launched in May this year. For loans up to Rs 30 lakhs, this floating rate scheme charges an interest rate of its PLR minus 385 basis points. And for loans up to Rs 30 lakhs, it is LHPLR minus 385 basis points.
However, if the interest rate cycle cools off faster than expected, the customers switching to the fixed rate option would be stuck paying higher rates.
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