Following pressure from the National Housing Bank (NHB), housing finance companies (HFCs) may revise interest rates in the coming days. Revised interest rates for a loan of less than Rs 20 lakh are expected to be announced on January 1, 2009 by various institutional lenders.

NHB CMD, S Sridhar said, "As we have reduced the rates, we also expect HFCs to reduce rates and pass on the benefits to the end-customers. Many housing finance companies have already reduced rates by 50-75 basis points. I expect them to cut rates further."

Dewan Housing Finance (DHFL), GIC Housing Finance (GICHF) and DHFL Vysya Housing Finance may revise interest rates by 1-1.5 percentage points to offer cheep home loans of up to Rs 20 lakh.

GICHF may offer home loans at 10.25% per annum for 5-15 years and 10.5% per annum for over 15 years. GICHF managing director, M Sivaraman said, "As we will get refinance from NHB on easy terms, we have decided to pass on the benefit to new customers from January 1."

DHFL, with a home loan portfolio of around Rs 5,000 crore, may also announce home loan interest rate cut both to existing and new borrowers. It is recalled that the public sector banks and the market leader Housing Development Finance Corporation (HDFC) has already slashed interest rates following pressure from the government. Public sector Banks are offering home loans at 9.25% for home loans below Rs 20 lakh and 8.5% for loans under Rs 5 lakh.