As people have been wishing each other a prosperous new year, several banks have given the best gift to home buyers by cutting their home loan rates.
Reportedly, Banks such as State Bank of India (SBI), ICICI and HDFC have slashed housing loan rate by 0.5, 0.45 and 0.45 percent setting at 8.6, 8.65 and 8.7 per cent. Other banks and housing finance companies are more likely to follow this footstep in a few days as they are flushed with funds due to demonetisation. On this 8.6 percent housing loan rate, now buyers can have a saving of Rs 4.32 lakh on a loan of Rs 50 lakh over a 20-year period.
Many realtors and builders expect the continuation of this low-interest-rate regime with a further drop for SBI and finally settling at 7.5 percent by the end of this year which will break the record of lowest home loan rate (7.75 per cent) in 2006-2008.
Low home loan rate is going to attract more buyers to opt for a bigger loan which would give them liberty to buy a bigger apartment or at a better location.
“Sales had taken a tumble and are down 20-25% against 2012-13 when the scene was buoyant. This rate cut will improve the sentiment, both among customers and developers. We expect the interest rate cut to boost sales. We should recover the lost ground by this year-end,” says Credai-Bengal, Chairman Nandu Belani.
Moreover, most of the banks including SBI, Punjab National Bank (PNB), Union Bank of India and IDBI decide to cut down lending rate which will be huge relief for builders as there was no significant increase in property prices from last 2-3 years but the construction cost hike tore up their profit margins.
Source: ET Realty