As domestic economic factors look positive and the economy is improving, real estate sector Demand has increased. Although, high interest rates Recently the demand for housing has been adversely affected, as home loans are getting costlier, making home costlier. Here is a guide about five banks offering home loans and the lowest interest rates.
Two types of interest rates: fixed and floating
Two types of loans are given by banks. While taking any loan, you should confirm what type of interest rate is being offered to you – fixed or floating. In a fixed interest arrangement, the interest rate remains the same throughout the loan tenure. For example, if you take a loan at a fixed interest rate of 8 per cent, this interest rate will remain the same throughout the EMI tenure.
The change in the floating interest rate in the bank’s MCLR will affect your EMI amount. For example, if RBI raises its repo rate, banks will pass on the rate hike and raise the interest rate to you. This will increase your EMI.
lowest interest rate bank
Private sector lender HSBC Bank is currently offering the cheapest interest rate of 6.85-7.75 per cent. Canara Bank offers an interest rate of 7.05-11.85 percent on home loans. Karur Vysya Bank is offering home loan at interest rates of 7.15-9.35 percent. Mortgage firm Bajaj Housing Finance is currently offering an interest rate starting from 7.2 per cent. Bank of Maharashtra is offering interest rates of 7.30-9.45 on home loans.
The interest rate varies based on the borrower’s risk profile such as CIBIL score, gender, salaried or non-salaried, and loan amount. If you have a good CIBIL score, you will get a lower interest rate as compared to those with a low score. Also, the higher the loan amount, the higher the interest rates.
Reserve bank to control inflation India (RBI) hiked the key repo rate by 50 basis points (bps) in early June, nearly a month after the central bank’s monetary policy committee raised it by 40 basis points in an off-cycle policy review in May. The second was development. Retail inflation stood at 7.04 per cent in May, which is higher than the RBI’s target of 2-6 per cent.
Subsequently, several lenders including ICICI Bank, State Bank of India and HDFC Bank increased their interest rates for both deposits and loans, making loans costlier.
According to a report by real estate consultancy firm Anarock, rising interest rates in the country following RBI’s recent repo rate hike and rising property prices are adversely affecting housing sales. Sales across seven major cities declined 15 per cent to 84,930 units in the June 2022 quarter from 99,550 units in the March 2022 quarter. Mumbai Metropolitan Region (MMR) saw the highest sales of around 25,785 units in Q2 2022, followed by NCR with around 15,340 units.
The report said developers restricted new supplies to around 82,150 units in the June 2022 quarter, as against 89,150 units in Q1 2022, a decline of eight per cent during the period. MMR and Pune were the only markets where new launches grew by 26 per cent and 14 per cent, respectively. The remaining top five cities saw a decrease in new launches.
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