ICICI Bank, has cut home loan rates for new customers by 25-50 basis points.

Earlier State Bank of India and post that Canara Bank had slashed interest rates on home loans.

According to the new floating rate structure, for home loans less than that of Rs 20 lakhs, the interest rates would be at 9.75% as against 10% earlier. For loans between Rs 20-30 lakhs, the new rate would be at 10% as against 10.5% earlier, while for loans of Rs 30 lakhs and above, the interest rates would be at 11.5% as against 12% earlier.

State Bank of India has a special offer for home loan seekers. Home buyers will now have to pay only 8% interest for a loan taken from the bank.

The new rate will be offered between Feb.2 and April 30, 2009, the bank said in a statement.

SBI had previously charged 9.75 percent on a floating basis for home loans, and 11.25-12.25 percent on a fixed basis.

Under a special scheme announced in December, it rolled rates back to 8.5-9.25 percent for loans up to 2 million Indian rupees ($41,000).

However, this facility would be available to the extent of 10 per cent of their home loans but up to a maximum of Rs. 5 lakh, an SBI release says.

The new scheme of eight per cent interest rate will be offered for loans taken during February 2 and April 30, the release says.

The bank would reset the interest rate after the freeze period to the same rate as originally applicable under the the respective schemes, the release adds.

The bank’s existing borrowers under the two home loan schemes — loans up to Rs. 5 lakh and Rs. 5-20-lakh bracket — would also be given loans at eight per cent for one year.

Here as well, after the freeze period the originally contracted rate will be applicable, the release says.

Private sector banks charge between 9.75 percent and 12.50 percent interest on home loans.

Home, auto and other retail loans will cost up to 0.75 per cent more, with lenders HDFC, ICICI Bank and SBI announced an increase in interest rates following the Reserve Bank squeeze on money supply.

HDFC will raise its minimum floating rate for home loans by 0.75 per cent to 11 per cent for new customers from 10.25 per cent from tomorrow, while the existing customers will have to shell out 0.50 per cent more at 10.75 per cent.

The new fixed rate would be 14 per cent, up 0.75 per cent. ICICI Bank increased its benchmark floating rate for retail customers, including home loan borrowers, by 0.75 per cent to 13.50 per cent.

The existing fixed rate customers, whose loans are fully disbursed, will, however, not be impacted by the increase and they will have to pay the prevailing rate.

ICICI Bank has also announced increase in benchmark rate for corporate by 0.75 percent to 16.50 percent.

HDFC bank also increased its deposit rates by 0.50 percent across most maturities, while ICICI Bank raised interest rates on fixed deposits of less than Rs 15 lakh by 0.50-1 percent .

The announcement by two banks came close on the heels of similar announcement by the largest lender SBI.

Now,Home Loan is very famous in India there are many banks offers Home Loan. Due to Property boom in India,Home Loan boom also originate in India, So the rat race to issue the Home Loans begin in India.ICICI Bank is a front runner bank to issue the Home Loans there are some Information about ICICI Bank home loan is given below.
Home is more or less a lifetime investment and hence home loans are an integral part of every person who dreams and wants to have a living space of his own. A once in a lifetime investment needs a loan and that is how a home loan comes into the scheme of things in your life.

ICICI Bank, one of the largest private sector banks in India, is a major player in the home loan category, with attractive interest rates and a host of incentives to the customer seeking a house loan. Gone are the days when you seek salvation in endless paperwork in the run up to the elusive golden pot of housing loans. It has almost become a doorstep service, with golden carrots like personal accident insurance and special 100 per cent funding for select properties dangling in front of you.

Eligibility for home loans

For availing the ICICI Bank home loan, the age limit is at least 21 years. Another eligibility criteria is that you must be employed or at self-employed .

The loan repayment must end when the person who availed it turns 65 or retires from service, whichever comes first.

For land loan the apart from the aforementioned conditions, the person availing loans should be purchasing the property for residential use and the purchase has to be from a development authority or a registered co-operative society. The land in question must be for construction of a house, with clearly marked boundaries, leaving no room for legal wrangle on this count.

The office premise loan can be for purchase or construction or extension of a non-residential property, but the bank insists on a 3-years’ work experience. Professionally qualified self employed individuals are eligible to apply.

To avail home equity loans, or loans against property, you must also be the owner of a self-occupied property.
Loan amount

A host of factors, including income, age, number of dependents, assets and liabilities as well as stability of count when the loan amount is sanctioned. But the eligibility for bigger loans is also enhanced by some factors.

If the loan applicant’s spouse is earning, the person can be a co-applicant which will enhance the amount. Co-owners, as a rule, must be co-applicants also. Your future spouse’s income can also be considered as combined income for loan, but the loan would be disbursed only after you tie the knot and produce the marriage certificate.

Additional securities like bonds, fixed deposits and LIC policies also enhance creditworthiness. The final loan amount depends on your repayment capabilities, within the limits set for each type of loan. Registration, stamp duty and transfer charges are included in total costs.
Documents

A passport size photograph, PAN card, voters ID, passport or license for age-proof, last six months’ bank statement, latest Form 16 and certified IT returns for the past 3 years Administration fee cheque and loan enclosure letter are the required original documents. The bank may ask for further legal documents if required.
Disbursal of loans

The loan amount is disbursed after the required documents are submitted and after you have selected the home or property. A 230 A clearance of the seller or 371 clearance from IT authorities are also necessary. After the conveyance deed is registered and you invest own contribution the loan amount will be disbursed in favour of the builder or seller. Loan agreements, request for disbursement, post dated cheques and in some cases personal guarantors request are required documents for disbursal. Documents may vary from state to state.

You can opt for fixed or adjustable rates.

In case of adjustable rates for Home/Land loans, the rate varies with the ICICI floating reference rate. There is no processing fee. The administration fee is 0.5% of the total loan amount, plus the service tax. The interest is calculated on monthly remaining amount. A part prepayment documentation charge of Rs. 500 is charged for part prepayment. The maximum tenure is 20 years.

For office premises loan, a processing fee of 0.5 % and an administration fee of another 0.5% is charged. Interest is calculated on the balance amount every month and maximum tenure is 15 years. A documentation charge of Rs 500 plus service charge is levied for part-prepayment.

For Home Equity loans, or loans against property, the administration fee is one per cent of the total loan amount plus service tax, while the interest is on monthly remaining amount. Maximum tenure allowed is 15 years and a documentation charge of Rs 500, plus service charge will be levied for prepayment.

In Fixed rate loans, the interest remains unchanged through out the tenure. For home/land loans the applicable rate of interest is 8.75 %. Administration fee is 0.5% of the loan amount plus service tax. Prepayment documentation charge of Rs 500 plus service charge is levied.

For office premises loans, a processing fee of 0.5 % and an administration fee of 0.5% is levied. The rate of interest is 11%.

For Home Equity loans, there is no processing fee. The administration fee is 1% plus f the loan amount plus service tax. The rate of interest is 10.5% for residential properties and 11% for commercial properties.

The repayment tenure varies. For Home Equity and office premises loans the maximum tenure is 15 years, while for home loans the maximum tenure is 30 years. The loans are to be repaid via equated monthly installments or EMIs. EMIs comprise both principal amount and interest. The EMI starts the month after the full disbursement of loan is made. This can be either deducted from your salary, or paid through post-dated cheques, dated normally to the first of every month, which can be extended to any date till 7th of the month, depending on the salary date. Bounced cheques and delayed payments will attract charges. Post-dated cheques can be replaced within 5-7 working days.

Applications can be put in even before selecting property. The applicant can select a property even if he is not residing in the city, but the ICICI bank needs to have operations in that city. You can withdraw from the loan within six months of the approval. You can apply for home loans online.

If you wants to save income tax in a legal way then Home Loan is a better option for saving tax on your Income.

There are different sections of the “Income Tax Act” of India under which you can avail deductions on the taxes, confers you to save a signification amount on your total tax liability.

There are two sections of the “Income Tax Act” of India which will allow you to get a deduction if you have taken a home loan,So, ignores home loans from “private sources” (Friend, Family, etc). The two sections are here under to save income tax.

* Sec 24(b) of the Income Tax Act, 1961
* Sec 80(c) of the Income Tax Act, 1961

Section 24(b) is with respect to the “Interest Paid” on the Home Loan and Section 80(c) is with respect to the “Principal Repayment” of the Home Loan.

The Section 24(b) of the Income Tax Act, 1961 is applicable on Home loan for purchase of house or construction of the house property. You can avail a deduction of up to Rs. 1,50,000 of you total tax liability, Also reconstruction or renewal or repairs is eligible for deductions under the said section.

The Section 80(c) of the Income Tax Act, 1961 allows you a deduction of up to Rs. 1,00,000 on the principal repayment amount.

Example
Suppose your total taxable income is Rs. 4,00,000.
Principal repayment is Rs. 1,50,000 and total Interest Payable is Rs. 1,80,000.

The total deduction allowed is Rs. 2,50,000 (1+1.5Lacs) under the sections. Hence now your total taxable income becomes only Rs. 1,50,000 (4-2.5Lacs) and that saves a lot of money!