09 January 2017

Slash in home loan rates shall give an impetus to the buyer confidence

News

In the aftermath of recent demonetisation of INR 500 and 1000 currency notes, some banks have reduced their bank rates. Reduction in bank rates has pulled down the home loan rates by 70 to 90 basis points. Consequently, the home loan rates are at their lowest point in the past six years. We have put together the change in home loan rates of a few major banks as follows: 

                                              Home Loan rates of banks
 Name of the Bank
 Previous Rate
 Current Rate (Fixed) as on 9 Jan 2017
 SBI
 9.10%
 8.60%
 HDFC
 9.10%
 8.70%
 ICICI
 9.10%
 8.65%
 Citibank
 9.50%
 8.80%
 Union Bank of India
 9.60%
 8.75%
 Kotak Mahindra Bank
 9.10%
 8.70%
 Axis Bank
 9.25%
 8.85%

Research view

The low-interest rate environment is likely to continue and we cannot rule out the possibility of further rate cuts in the coming months. We anticipate the announcement of a few more incentives in the upcoming Union Budget that may increase the disposable income in the hand of buyers. In our opinion, the reduction in home loan rate coupled with other incentives should give a boost to the homebuyers’ sentiments in 2017. 



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