IHPLR Change – FAQs
ICICI Home Finance Company has increased its floating rate of reference IHPLR for Home Loans by 50 bps (i.e. 0.50%) from 16.50% to 17.00%.
This will lead to increased Interest rates of 50 bps (0.50%) for all existing floating rate customers.
The above rates are effective from May 07, 2011.
My rate of interest is linked to IHPLR. How will it be affected by rate change?
The IHPLR has been increased by 50 basis points (i.e. 0.50%) with effect from May 07,2011. IHPLR has changed from 16.50% to 17.00%. Thus, the rate of interest will go up by 50 basis points (i.e. 0.50%).
From when are the new rates applicable?
The new rate of interest will be applicable from May 07,2011.
Why is the reset done from June 01,2011?
For all home loans with first disbursals before 4th July 2006 the rate of interest will be reset on a QUARTERLY basis.
Thus, the change in the rate of interest will be effective from the next reset date i.e. from July 01,2011.
For all home loans with first disbursals on or after 4th July 2006 the rate of interest will be reset on MONTHLY basis.
The reset dates for effecting the rate of interest changes for these existing customers will be the first date of the coming month after reset.
Thus, the change in the rate of interest will be effective from the next reset date i.e. from June 01,2011 as applicable.
FLOATING RATE LOAN
I am an existing customer of home loans and have taken the loan on Floating rate. How will the change in rate affect me?
As your loan is linked to IHPLR the rate of interest on your loan would increase by 50 basis points (i.e. 0.50%), due to the change in the IHPLR on May 07,2011. This will correspondingly, impact your EMI or tenor.
What is the impact as my floating rate loan is fully disbursed?
In case your loan is fully disbursed, the rate of interest on your loan will be increased by 50 basis points (0.50%). The new IHPLR will be applicable from the next reset date i.e. June 01,2011.
What is the impact as my floating rate loan is partly disbursed?
For all past disbursements, the new rates will be applicable on the disbursed amount from the next reset date i.e. May 07,2011.
All further disbursements would be at the revised rates.
I have taken a sanction on floating rate and have not availed any disbursement till date, how will the change impact me?
In case your loan is linked to IHPLR and you have taken a floating rate loan, the rate of interest on your disbursement amount would be 0.50% higher than the rate as specified on your sanction letter due to the change in IHPLR by 50 basis points. The rate would increase, as the rates are subject to change in IHPLR.
What is my new loan tenor? OR By how many months will my loan tenor increase?
Your new loan tenor would be dependent on the number of years that are remaining for your loan and your rate of interest.
This rate increase will impact your EMI or tenor. For further details, you can also walk into your nearest ICICI Home Loans branch after June 01,2011.
What is my new EMI? OR How much has my EMI increased by? Will my current EMI cheques have to be changed and where do I have to submit them?
This rate increase will impact your EMI or tenor. We will be sharing a text communication regarding the same after June 01,2011. The same communication will include the process for changing your EMI. In case of further clarifications or to know about the reset process, you can also visit your nearest ICICI Home Loans branch after June 01,2011.
What should I do to change my EMI? Will there be any charges if I want to change my EMI?
This rate increase will impact your EMI or tenor. If you wish to further change your EMI you can contact our nearest ICICI Home Loan branch on or after June 01,2011. There would be no additional charges applicable for changing your EMI.
Incase of payment mode as PDC, please carry 36 cheques with you, as the earlier cheques would need to be replaced.
In case you have opted for ECS as repayment mode for your loan and your final disbursement was taken after July 01, 2007, you are requested to come to our branch and submit a new ECS mandate form.
However, in case you have opted for ECS or AD as your mode of repayment and your final disbursement was taken before July 01, 2007, you don’t need to change the current mandate.
I have just switched my loan to Floating ROI, how will the changes impact me?
If you have switched to Floating Rate and have availed full disbursement.
The new rates will be applicable to your loan from the next reset date i.e. June 01,2011.
If you have switched to Floating Rate and have availed part disbursement.
For all past disbursements, the new rates will be applicable on the disbursed amount from the next reset date i.e. June 01,2011.
When you avail further disbursement, the fresh disbursements will be at new rates.
I had taken a loan under Dual rate scheme. How will this change in IHPLR impact me?
The change in IHPLR will not have any immediate impact on your EMI as your rate is fixed for the the specified period from the date of first disbursement. After the fixed period, your rate changes to floating and the benchmark rate applicable then will determine what rate you will pay.
FIXED RATE LOANS
I am a Fixed rate loan customer, what is the new rate in my case?
If you have opted for fixed rate of interest the impact of the change in interest rate would be based on the stage of your loan disbursement.
I have availed full disbursement how will the rate change impact me?
There would be no change in your rate.
I have taken a part disbursement how will this change in interest rate affect me? What rate will I get?
If you have taken a fixed rate loan, the rate of interest on the already disbursed amount will not change with the IHPLR change. Currently there is no change in the fixed rate ROI offered by us, hence ROI will not change for further disbursements in fixed rates also.
I have just taken a fixed rate loan sanction? Will I get the rate mentioned on my sanction letter?
In case of fixed rates loans, the rate of interest gets fixed at the time of disbursement.
If you have already taken part disbursement, the rate of interest on the already disbursed amount will not change.
If you have already taken part disbursement, the rate of interest on the already disbursed amount will not change. Currently there is no change in the fixed rate thus the subsequent disbursement will also be at the same rate. In future, if there is a change in fixed rate before your full loan disbursement, the subsequent disbursements will be at the new rate of interest. The rate of interest on the total loan amount disbursed will be the weighted average rate of interest.
If you have already taken part disbursement, the rate of interest on the already disbursed amount will not change. Currently there is no change in the fixed rate thus the subsequent disbursement will also be at the same rate. In future, if there is a change in fixed rate before your full loan disbursement, the subsequent disbursements will be at the new rate of interest. The rate of interest on the total loan amount disbursed will be the weighted average rate of interest.
I have just switched my loan to fixed ROI, before May 07,2011, how will the changes impact me?
If you have switched to Fixed Rate and have availed Full disbursement.
The new rates will not impact your loan.
If you have switched to Fixed Rate and have availed part disbursement
The rate of interest on the already disbursed amount will not change. For your balance loan amount the rate applied would be as applicable at the time of disbursement. The rate of interest on the total loan will be the weighted average rate of interest.
INCOME TAX BENEFITS
How will the new rate affect my tax savings / IT benefits?
The total interest payable by you i.e. inclusive of the increased interest amount would qualify for deduction under Section 24 for income tax purpose up to overall limit of Rs. 150,000/-. So you will continue to enjoy the tax benefits.
Principal repayments would qualify for deduction from taxable income under Section 80C up to overall limit of Rs. 1,00,000/-.
INSURANCE BENEFITS
I had availed of a home insurance HomeSafe Plus / HomeAssure. How will it get affected due to the change in rate of interest?
In case the customer had availed of HomeSafe Plus by ICICI Lombard
The insurance cover is applicable for a period of 5 years from the first disbursement of the home loan and will continue to be applicable for the 5 year period.
In case the customer had availed of HomeAssure by ICICIPrudential
The insurance cover is applicable for original loan tenure and will continue to be applicable for the original loan tenure. The insured amount is the loan outstanding (as per the original amortization schedule) at the time of death.
CUSTOMER QUERIES REGARDING FUTURE ACTION
What will be my new repayment / amortization schedule? Can I get my new repayment schedule?
In case you would like to know about your changed tenor or revised rate of interest you can either walk in to a branch or write to customer.care@icicibank.com.
Can I change my current loan from a floating rate loan to a fixed rate loan? What will be the rate that I will get? Are there any fees that I will have to pay for switching?
Yes, you can change your current loan from a floating rate loan to a fixed rate loan. The fixed rate of interest for home loans would be the prevailing rate as applicable at the time when you approach Home Loan Branch for switching from Floating rate to Fixed rate.
To change from Floating rate to Fixed rate loan you will have to pay a switch fee of 1.75% (+ applicable service tax) on your outstanding loan amount at the time of such switch.
What is the process for changing from a floating rate home loan to a fixed rate home loan?
For changing from a floating rate home loan to a fixed rate home loan you will have to execute an amendatory loan agreement/letter of amendment for switch and pay a fee of 1.75% (+ applicable service tax) on your outstanding loan amount. For this you should approach a Home Loan branch.
Can I close my home loan? What is the charge for prepayment of my loan?
You can make part prepayment of your Home Loan. There is no charge on part pre-payment of your home loan.
Incase of full prepayment your loan, you will be charged prepayment charges of 2% (+ applicable service tax) on the outstanding amount in your loan account at the time of prepayment and amounts prepaid in the last one year, if any.
If the full prepayment is done for loan in which a home loan (and not any other mortgage loan such as land loan, top up loan, Loan Against property (LAP), Lease rental discounting (LRD) etc) and payment made is from your own sources of funds, then prepayment charges will not be applicable. For details, please read the FAQ's on this.
GENERAL QUESTIONS
Are the interest rates going to reduce again in the future?
These are market determined rates and it is not possible for us to predict interest rate movements.
On what basis does the IHPLR change? / Why the rates have been changed?
The IHPLR is benchmark reference rates of the ICICI Home Finance Company Ltd. (HFC) This is determined based on the market conditions and the cost of funds of ICICI HFC. As the cost of funds has increased, we have increased the IHPLR.
I am an existing customer, why is the rate of interest higher than the new customers?
The rate of interest depends on the prevailing rate at the time of disbursement. It could also be different because of special schemes offered by ICICI HFC from time to time and market conditions prevalent.
When will I receive any communication on change of interest rate?
You will be receiving a communication after June 01,2011 informing you about the change in interest rate.
