Mortgage financer LIC Housing Finance Ltd (LICHFL) on Thursday said it will reduce its lending rates to 7.5 per cent for new home buyers having a Cibil score of 800 and above.

“The RBI has taken a number of steps to provide enough liquidity to the system. We are also getting cheaper cost of funds and we want to pass on that benefit to customers. This will also help in bringing consumers’ confidence back to the sector,” LICHFL managing director and CEO Siddhartha Mohanty said.

The home financier will give additional 10-basis-point benefit to new home buyers and will offer home loan at 7.4 per cent to customers who are linking their existing or new single-term insurance policy to the loan taken from it.

“In the case of the unfortunate death of a borrower, the term policy will take care of the loan,” Mohanty said.

The reduction in home loans will also be available for new home buyers with a Cibil score lower than 800 but at a higher interest rate.

“The rate of interest is linked to the creditworthiness as reflected in the Cibil scores of the borrowers,” the company said.

The LIC Housing scrip on Thursday rose Rs 24.20, or 9.21 per cent, to close at Rs 287.10 on the BSE against the previous close of Rs 262.90.

HDFC recently reduced its home loan rate by 15 basis points, offering the lowest rate of 7.85 per cent for loans less than Rs 30 lakh.