The National Housing Bank (NHB) has urged housing finance companies (HFCs) to lower home loan rates, saying reduced borrowing costs have not been passed to borrowers. A chief executive from a large HFC said, "The NHB chairman put considerable pressure on the ecosystem to transmit lower rates to end customers." HFCs raise funds at much lower rates but continue charging higher interest rates to existing borrowers. Currently, HFCs own about 20% of India's mortgage market. They keep high prime lending rates (PLR) but offer big discounts to customers. For example, LIC Housing Finance's starting home loan rate is 7.15%, while its PLR is about 17%. HFC loan rates depend on funding costs, risk, operating expenses, and profit margins. Despite the central bank cutting the repo rate by 125 basis points to 5.25% in the last year, and NHB refinance rates near 7%, these lower costs have not fully reached borrowers. One CEO mentioned, "Several HFCs have argued that there will be a more meaningful downward movement in lending rates once the MCLR reset happens in April." Some lenders are responding. Aadhar Housing Finance cut its retail PLR by 15 basis points to 17.50% from February 10, 2026. Aavas Financiers also cut PLR by 15 basis points to 17.80%, starting March 1, 2026. Although the Reserve Bank of India became the main regulator for HFCs in 2019, NHB remains important as a supervisor and refinance provider. It inspects HFCs and influences the sector. As of March 2025, HFCs had outstanding loans of ₹9.59 lakh crore, slightly down from ₹9.61 lakh crore a year earlier. Their share in total housing credit dropped to 18.8%, partly due to two HFCs becoming NBFCs. Housing loans made up 73.8% of HFC credit as of March 2025.