Home loan

Should you go?


Almost all banks try to attract customers with attractive offers, ranging from low interest rates to zero processing fees.

It’s that time of year when it rains festive offers on home loans. Almost all banks try to attract customers with attractive offers, ranging from low interest rates to zero processing fees.


India’s largest bank, State Bank of India, offers 6.7% home loans regardless of the loan amount. However, to qualify for this offer, your CIBIL score must be 800 or higher. The offer is valid until December 31, 2021. The bank has also waived processing fees on home loans. Previously, if you took out a loan of more than Rs 75 lakh, you had to pay 7.15% interest. Now the same loan can be used at 6.70 percent, a saving of 45 basis points (bps). A basis point is one hundredth of a percentage point. For a loan of Rs 75 lakh for a period of 30 years, this leads to a saving of Rs 8 lakh.

Non-bank finance company HDFC Ltd also offers 6.7% home loans. This applies to any loan amount and to people of any job class.

ICICI Bank has also joined the movement to offer real estate loans linked to pensions at 6.7%. Processing fees start from Rs 1,000.

What should you do

With interest rates on home loans at an all time high, this might be a good time if you are looking to buy a home. “In the current scenario, given the tensions in the market, the scope of a further cut in interest rates is very small. In this context, if clients have any requirements, they should take advantage of these offers, ”says Anant Ladha, founder of Invest Aaj For Kal, a financial planning firm.

Agree V. Swaminathan, CEO, Andromeda and Apnapaisa, a loan distribution company, “Experts believe mortgage rates cannot go down more than what we have now. In fact, they believe that once economic activity picks up in all sectors, the RBI could increase lending rates, which could also increase mortgage rates. “

Now is a good time to take advantage of the low interest rate offers on home loans. In addition, real estate prices have remained at the same level. “During the first wave of Covid, it was believed that house prices would bottom out, which did not happen. Real estate prices have remained almost the same, with perhaps a slight drop in some pockets. However, mortgage rates fell to their lowest level in 15 years, thanks to the reduction in RBI repo rates, ”Swaminathan said.

Things to keep in mind

While a low interest rate plan is a good reason for you to take out a home loan now, there are a few things to keep in mind. “Many of these festive offers often come with specific clauses such as high credit rating, profession of borrower, up to a certain loan amount only, etc. Borrowers are required to read the exact terms carefully. before finalizing, ”says Swaminathan.

A borrower should research the best interest rates for home loans and not make any decisions based on eye-catching advertisements. “Also, see if further negotiations are possible. Currently, borrowers are in the driver’s seat, as banks compete fiercely for clients, ”explains Anuj Puri, president of ANAROCK group, a real estate services company.

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