[ecis2016.org] Interest rate on home loans have hit a record low and chances of any further downward correction are quite slim
Through consistent reductions, most Indian banks have brought home loan interest rates to the sub-7% level. The move, which is primarily aimed at boosting consumption in the country’s second-largest employment-generating sector, at a time when the economy has been severely hit by the Coronavirus pandemic, may prompt many buyers to materialise their dream of property ownership, in spite of an overall economic depression.
You are reading: Will home loan interest rates fall further?
After the RBI reduced the repo rate, at which it lends money to the banks, to 4%, almost all banks have lowered the interest rate on their floating rate home loans. With this, interest rates on home loans currently stand at a record 15-year low level.
[ecis2016.org] Home loan interest rates and EMI in top 15 banks
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Cheapest home loans by Indian banks
Lender | Interest rate in percentage |
Union Bank | 6.70 |
Bank of India | 6.85 |
Central Bank of India | 6.85 |
Punjab and Sind Bank | 6.90 |
Canara Bank | 6.90 |
SBI | 6.90 |
PNB | 6.80 |
HDFC Bank | 6.90 |
ICICI Bank | 6.90 |
Bank of Baroda | 7.00 |
Bank of India | 6.85 |
Data as on November 30, 2020
[ecis2016.org] Are you eligible for the reduced home loan interest rates?
However, should a borrower stay put and wait for the banks to cut interest rates further? Should one not consider the possibility of the RBI further reducing the repo rate, which could again trigger a rate-cutting spree among banks? Sector experts do not think so.
Will the RBI increase or cut the repo rate?
The RBI, on December 4, 2020, decided to maintain a status-quo on the repo rate, at 4%, amid stubbornly high inflation. A spike in consumer prices forced the six-member RBI monetary panel to hit the pause button on reductions after cutting rates by 115 basis points in 2020.
Will banks reduce home loan interest rates further?
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According to Dinesh Kumar Khara, chairman of the country’s largest lender, State Bank of India (SBI), lending rates have actually bottomed-out and will remain at these levels for a while, till the economy recovers.
Khara indicated that financial institutions in India are aware that the Coronavirus-hit economy requires softer rates to continue. “We are very mindful of supporting growth presently,” he told the media.
Rates could, however, start showing an upward movement, as soon as economic activity picks up and some semblance of normalcy is restored. Keeping in view all these factors, this might be the best time for property investments with the help of housing loans that will also enable buyers to get tax benefits.
[ecis2016.org] All about home loan income tax benefits
FAQs
What is the rate of interest on home loans in India in 2020?
Most banks have reduced home loan interest rates to below 7% level.
How does my credit score impact my home loan interest?
Banks offer the best interest rate to only those customers who have a high credit score.
Will the RBI cut rates further?
The RBI is likely to maintain status-quo on key policy rates in the beginning of 2021.
Source: https://ecis2016.org/.
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