A recent press report said that the secular rise in interest rates over the past year or so is disappointing home buyers and has also affected the housing finance companies (HFCs) which may have to consider with a fall in income in the changed scenario.
Reports said that the effect has not affected the performance of India’s biggest mortgager HDFC which still continues to report stable earnings, but its smaller peers such as LIC Housing and Dewan Housing are affected by the hike.
HDFC has posted a marginal growth in its net profit sequentially while both LIC Housing and Dewan Housing reported a sharp drop. LIC Housing and Dewan Housing have also reported a fall in their loan sanctions in the quarter to June 2011.
HDFC has recently introduced the teaser home loan scheme where the interest rates will be fixed for the first two or three years after which the rates will be switched over to floating interest rates.