New Delhi: Loan market could be in for a serious price war. GE money has launched a home loan product with a floating rate of 9.99 per cent, much cheaper than the 11 per cent being charged by market leaders.
Wizard Home Loans a joint venture between GE money and Australia's mortgage major -Wizard, hopes to bag 30 per cent of the Indian home loan market in the next 3 years by offering the cheapest rate.
The company has launched it first floating rate product at 9.99% for a minimum of 20 years for a min loan Rs 10 lakh. GE claims its current cost of funds are much lower than the 9.5% being projected by competition and hence the competitive rate
“One of the things India has enjoyed over the last few months is a lower cost of funds. I think it is not necessarily being passed on a retail rate. This not an introductory price this is a rate we and our partners have worked out keeping in mind our margins,” says Mark Bouris Chairman, Wizard.
Besides this, Wizard Home Loan branch offices will be run by owner-operators, like franchises- bringing down the total operating costs. Nevertheless, since NBFC’s are not allowed to take deposits maintaining the current cost funds will be a challenge.
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