And even before that, ICICI Bank and HDFC had tweaked their home loan products allowing borrowings at a fixed rate for a couple of years. Click to Apply for HDFC Home Loan

Indeed, with inflation nudging double digits, consumers’ budgets are clearly stretched and they are less confident of being able to pay the EMIs (equated monthly installments).

“Generally, there are fewer takers for home loans, so we are trying to push the product. We have trimmed rates across categories and so a customer can no get for a loan of below R25 lakh for sub 11Percent if he’s repaying it in five years,” AK Dutta, ED, Dena Bank, said.

Bhaskar Niyogi, CGM, SBI, said, “There is clearly a slow down in the demand for home loans partly because the prices remain high and buyers are waiting for a correction.”

Sensing their discomfort at paying higher EMIs, banks are trying to make it easier for customer’s pockets. SBI Niyogi pointed out that interest rates on home loans have risen by about 175-200 bps over the past year or so. “We are considering extending the loan tenures rather than increasing the EMIs to make it more affordable for the customers,” he said.

Central Bank of India, too, is making is easier for customers to service loans by increasing the tenure. Ram Sangapure, GM retail, said, “We have refrained from increasing the EMIs and are instead extending the tenure of the loans. For a five year tenure, EMIs can be paid over 64 months.”

In fact, Dena Bank hasn’t stopped at dropping rates for just home loans. It has also trimmed rates on car loans by 25 bps as has Punjab National Bank. Banks are under so much pressured when it comes to selling loans that most of them have waived off processing charges or cut them by a hefty 50Percent.

M Narendra, CMD, Indian Overseas Banks, confirmed that his bank has waived off processing charges. “We are fine-tuning our loan rates to make them more attractive and will be rolling out an advertising campaign soon,” Narendra said.

Union Bank of India is also concerned at the subdued demand for loans from individuals.

“The slowdown in the offtake of retail loans is more pronounced this year and so, since the beginning of September, we have cut processing fees for retail loans by half. We may consider lower interest rates for home loans,” SS Mundra, ED, Union Bank of India, said.

Punjab National Bank has been able to sell more car loans after it introduced a new product for auto loans, said KR Kamath, CMD, PNB, and added that the bank is financing 100Percent of the cost of the vehicle. “We have sold 1,500 vehicle loans more in August than in July,” Kamath said.