The Home Saver product is like an overdraft facility and will directly compete with the State Bank of India’s Maxgain home loan scheme. HDFC Ltd offered a Home Refurbishment loan before its merger with HDFC Bank, and it will be relaunched soon.
Both the products will be offered to the existing and new customers, Arvind Kapil country head – mortgage banking, home loan, and LAP at HDFC Bank told media persons. The Home Refurbishment loan is likely to be 100 basis points higher than the rate at which the bank charges home loans, he said.
HDFC Bank currently charges between 8.55% and 9.10% on home loans linked to the external benchmark lending rate (EBLR).
Arvind Kapil said that HDFC Bank’s market share in the retail home loan segment has risen by 20% on incremental disbursement, and it is seeing 3.6% growth sequentially – the highest amongst peers.
He said that home loans would generate liability and boost current and savings accounts (CASA) – known as low-cost funds. HDFC Bank’s CASA was at 38% of its total deposits, down from 42% in June 2023. The reduction in Casa is largely on account of a merger between HDFC (which does not have CASA) and HDFC Bank effective last July.
HDFC Bank is the preferred bank for new home loan borrowers. “Pre-merger, about 30% to 35% of incremental disbursals, were to customers with an HDFC Bank savings account. This has reached about 80% of incremental disbursals, post-merger,” said Arvind Kapil. The home loan business has become both an asset and liability generator and is growing sizeably… and this is done without compromising on underwriting standards, he added.
A statement issued by the bank said that all erstwhile HDFC service centres will be converted into branches in a phased manner.
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