It has never been a better time for homebuyers than now, as the recent reduction in home loan rate of interest by most banks in the country indicates. The rates were reduced to 6.65 percent per annum, which is the lowest in the market, by Kotak Mahindra Bank. The Government-owned behemoth State Bank of India is lending for home loans at a reduced interest rate of 6.70 per cent. Further, the customers applying for a home loan through SBI’s net banking YONO app get an additional interest concession of 5 bps. Moreover, the SBI also waives processing fees on all home loan applications.
Both Banks have offered a 15-year low-interest rate on home loan till March 31, 2021, targeting home loan customers before the fiscal year ends.
Good time to buy a house
If you are mulling on your dream to buy a new house? There is no better time than now. With State Bank of India (SBI), Kotak Mahindra Bank reducing the interest on home loan rates, you are in a win-win situation. Homebuyers are getting all-time low-interest rates, various offers, including discounts on processing fees, and benefits for women buyers to lure the home buyers.
When the leading private lender ICICI Bank announced a reduced interest rate on home loans up to ₹ 75 lakh to 6.70 per cent, its lowest in 10 years recently, real estate developers expected to spur a rise in real estate sales in the coming months. The euphoria among the aspiring homebuyers was already on the upward trend after the country's largest lender- State Bank of India, reduced its interest rate on home loans to its lowest rates, coming down up to ₹ 75 lakh to 6.70 per cent, on record. With the new financial year around the corner, leading banks have reduced interest rates on home loans, probably, to take advantage of stamp duty relaxation and compete in a sector witnessing low credit demand.
Realty experts feel that the benign interest rates environment will continue for some time, and it is unlikely that interest rates will fall further from the current levels. Therefore buyers can make the most of good deals on the back of rock-bottom interest rates on home loans, stamp duty relaxation, offers and the availability of choices from good developers. Already, there has been a rise in demand for residential properties as people are beginning to believe that this is the best time to buy a property, feel most property dealers.
Property experts believe that this is the best time to buy a home as it gives aspiring homebuyers a lifetime opportunity to purchase their dream home with reduced stamp duty as well as all-time low-interest rates.
Should you go for a home loan now?
According to bank officials, this is the best time to buy a home, as interest rates are at a 15-year low and property prices are sluggish. It could be the lowest possible EMI shortly. Even during the massive setback to the real estate sector triggered by pandemic-induced lockdown, the housing business vertical registered unparalleled growth in the home loan business. Homebuyers felt that a home was a good investment and the best alternative in the circumstances induced by the pandemic.
For property buyers, the two most important factors are interest rates on home loans and property prices, and the interest rate on home loans is the most critical consideration. Hence the prospective buyers might do well to ride on the accommodative monetary policies pursued by the Reserve Bank for boosting economic growth.
Rates might not fall further.
It is better to make hay while the sun shines, as RBI will not reduce rates any further, considering rising inflation. With interest rates at their lowest in 15 years and as property prices are also at an all-time low, the time is apt to book a dream house now, says the market watchers in the realty sector.
Hence, homebuyers would do well to invest in buying a property and keep the EMIs low and affordable with a lower loan paying period.
Currently, Property prices are stagnant.
Various factors like lack of demand and excess supply had taken a toll on the property market. The decline compounded because of the pandemic. During 2019-20 the housing sector witnessed prices decline by 5-10 per cent or more across segments impacted by a loss of jobs and salary cuts.
However, with the recent schemes, reduced rates of home loans and offers from developers and government incentives to home buyers, the price benefit is between 5 percent and 15 per cent compared to pre-COVID levels, says a prominent economist.
Prices will not drop further.
It is unlikely that prices may further dip as there is no scope to reduce them anymore. On the contrary, as the economy recovers, property prices will gradually soar to pre covid levels. Moreover, the festive discounts offered by different developers are at their best. Homebuyers would do good to request a cash discount and opt for ready-to-move houses as there are no worries about handover delays then.
Considering everything, this is the best time to opt for fixed rates of home loans at this time when rates are at their nadir.
Hence, it is perhaps the best time to fulfil your dream of owning a home and benefit from a once in a lifetime moment.